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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 24,586.98 82.18 0.34%
Nasdaq 6,885.28 22.97 0.33%
S&P 500 2,669.11 5.00 0.19%
Treasuries 2.38 -0.02 -0.83%
Data as of 10:23am ET
Company Price Change % Change
Bank of America Corp... 29.19 -0.13 -0.44%
Advanced Micro Devic... 10.11 0.21 2.12%
Micron Technology In... 42.74 0.88 2.10%
General Electric Co 17.86 -0.05 -0.26%
AT&T Inc 37.53 -0.57 -1.50%
Data as of 10:08am ET