Stock prices have recovered nicely after the decline we saw yesterday that was sparked by the minutes from the last Fed meeting. By early afternoon in New York, the Dow boasted triple-digit gains, rising 0.65% or 103 points to 16,144, while the broader-based S&P 500 index drew within 0.6% of its all-time high, climbing 0.61% to 1839.9.
Manufacturing data has seemed to be all over the place lately, with prominent regional surveys conducted by Federal Reserves Banks showing softness, but Markit’s manufacturing PMI, taken from a nationwide sample, suggests unexpected strength in the preliminary reading for February. The Philly Fed’s survey fell to -6.3 for February, plummeting down from the respectable 9.4 seen last month, while Markit’s PMI surged to 56.7, bouncing back from the expansionary-but-weak 53.7 reading for January.
One of the stronger components in this month’s PMI was new orders, which points to future strength, while employment improved 0.8 to 54.0. This encouraging sign for the labour market was backed up by a drop in the number of first-time claimants for unemployment benefit. Jobless claims sunk to 336,000 last week, an improvement of 3000. While this doesn’t necessarily promise an upbeat employment report at the beginning of next month – badly needed after bewilderingly weak results for December and January – it’s a step in the right direction.