The Dow, Nasdaq and S&P 500 averages recovered almost all of yesterday's losses though they finished below their best levels for the session.
The Dow closed up 99.2 or 0.71% to close at 13,979.30 after touching 14,013.60 the highest in more than five years. The Nasdaq added 40.41 points or 1.29% to end at 3171.58, its highest level since September 14th last year. The S&P 500 gained 1.04%, 15.58 points to finish at 1,511.29, having reached 1,514.96 in the afternoon, its best point since October 2007.
Stocks were helped higher by the morning's generally positive report on the service sector from the Institute for Supply Management. The January ISM composite registered 55.2, slightly better than the 55.0 reading forecast by economists, though lower than the revised 55.7 score for December, initially 56.1. Service industries comprise about 90% of the American economy. Readings above 50.0 indicate expansion.
The gauge for employment came in at 57.5, the highest measurement in one month less than seven years. In February 2006 it was 58.1
Other component indices were less buoyant. Business activity dropped to 56.4 from 60.8, backorders to 49.0 from 49.5, export orders slipped to 50.5 from 51.5 and imports declined to 50.0 from 51.5. Belying the overall modestly positive tone of the report new order fell 3.9 to 54.4 in January from 58.3 in December. It was the weakest result for this forward indicator since April and it was the biggest one month plunge since the 8.8 points fall from October to the November 2008 all-time low of 35.3.
Chief Market Strategist