US Stocks end higher on positive data

The US equity market finished session higher on Monday, 03 February 2020, as risk sentiments lifted by an unexpected rebound in US manufacturing in January after contracting for five straight months amid a surge in new orders. Market gains were, however, capped amid worries about the potential impact of the coronavirus in China. At closing bell, the Dow Jones Industrial Average gained 143.78 points, or 0.51%, to 28,399.80, while the S&P 500 index climbed 23.40 points, or 0.73%, to 3,248.92. The Nasdaq Composite Index advanced 1.34% to 9,273.40.

U.S. stocks got a lift to start February following a significant selloff last week amid concerns over an Asian influenza that has thus far claimed at least 361 lives and infected more than 17,000 people in China. Also helping drive gains in U.S. stocks were better than expected data on the manufacturing sector from the Institute for Supply Management

ECONOMIC NEWS: US Manufacturing PMI Expands In January-US manufacturing purchasing managers index surged up to 50.9 in January after slipping to a revised 47.8 in December, with a reading above 50 indicating growth in manufacturing activity, according to a report released by the Institute for Supply Management on Monday. With the much bigger than expected increase, the index returned to expansion territory for the first time since July 2019. The jump by the headline index came as the production index soared to 54.3 in January from 44.8 in December and the new orders spiked to 52.0 from 47.6. A reading above 50 indicates expansion in the manufacturing sector, which accounts for 11 per cent of the US economy.

US Construction Spending Edges Lower In December-US construction spending dipped by 0.2 percent to an annual rate of $1.328 trillion in December after climbing by 0.7 percent to a revised rate of $1.330 trillion in November, the Commerce Department reported on Monday. With the unexpected decrease, construction spending pulled back off the more than one-year high reached in the previous month. Spending on private construction edged down by 0.1 percent to a rate of $991.2 billion, as a 1.4 percent jump in spending on residential construction was more than offset by 1.8 percent slump in spending on non-residential construction. The report said spending on public construction also fell by 0.4 percent to a rate of $336.4 billion, with the decrease partly reflecting a 2.1 percent nosedive in spending on educational construction. Meanwhile, the Commerce Department said the value of construction in 2019 was $1.304 trillion, 0.3 percent below the $1.307 trillion spent in 2018.

COMMODITY NEWS: Crude oil prices remained under pressure, as the outbreak is weighing on demand for the commodity. Brent crude fell $2.17 to settle at $54.45 a barrel, while US West Texas Intermediate (WTI) crude fell $1.45 to settle at $50.11 a barrel.

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