Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

ISM manufacturing activity surges

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- While everyone's been worried about a double-dip recession, the manufacturing sector has been on a quiet tear, expanding in August for the 13th straight month, the Institute for Supply Management said Wednesday.

Economist Paul Ashworth of Capital Economics called the report "a rare piece of good news."

The manufacturing index hit 56.3 in August, up from July and well ahead of expectations. Any reading above 50 signals growth; a drop below 41.2 is associated with a recession in the broader economy.

In a research note, Ashworth said he was "worried about an even bigger drop" than the predictions because regional manufacturing surveys showed "sharp deterioration" in August.

Economist Ian Shepherdson of High Frequency Economics was also worried about trends in the sector. In a research note, Shepherdson said the report was "a very big and pleasant surprise," but he warned the index has further to fall and investors should "enjoy this while it lasts."

Stocks got a boost after the report's release, with the Dow index (INDU) surging 230 points.

China's manufacturing sector also picked up in August, according to a pair of reports released earlier Wednesday, calming fears about the pace of that country's growth. To top of page

Index Last Change % Change
Dow 17,862.67 156.62 0.88%
Nasdaq 4,885.97 24.91 0.51%
S&P 500 2,089.55 13.49 0.65%
Treasuries 1.85 -0.01 -0.43%
Data as of 11:44am ET
Company Price Change % Change
Bank of America Corp... 14.90 0.22 1.50%
Chesapeake Energy Co... 4.30 0.25 6.20%
Hewlett Packard Ente... 17.83 1.58 9.72%
Freeport-McMoRan Inc... 11.46 0.35 3.15%
Apple Inc 98.73 0.83 0.85%
Data as of 11:30am ET
Sponsors

Sections

As the Verizon workers' strike continues to drag on, shares of the telecom giant have lagged the broader market -- as well as top competitors AT&T and Comcast. More

Coca-Cola announced it had suspended production of Coke in Venezuela and other sugar-sweetened beverages due to a lack of raw sugar. More

As the Verizon workers' strike continues to drag on, shares of the telecom giant have lagged the broader market -- as well as top competitors AT&T and Comcast. More