With this news, most of the concerns that had been building over the global economy in last few weeks were soothed.
On September 1, the Dow Jones industrial average jumped 255 points. With investors pouring into stocks, Treasury prices went down and interest rates rose.
The new reports overturned a thread of unsatisfactory economic information that sent stocks slumping in August. The Standard & Poor's 500 Index, the benchmark most extensively used by professional investors, lost 4.7% in the month. This was its worst August performance since 2001.
The Institute for Supply Management has informed that manufacturing activity in the United States shot up in August this year - quite the reverse to regional date received from recent weeks that reflected a delay in growth. But economists were foreseeing a decline.
In the last weeks, some analysts stated that the slowdown in economic growth could ultimately take the nation back into recession. Industrial stocks also received a big raise from the strong manufacturing report (including General Electric and Eaton).
In August this year, China’s manufacturing sector also picked up momentum. Markets abroad rose after Australia said its economy improved in the second quarter at the fastest pace since 3 years.
The Dow gained 254.75 points, or 2.5%, to close at 10,269.47. Broader indexes also had large gains. The Standard & Poor's 500 index rose 30.96, or 3%, to 1,080.29, and the Nasdaq gained 62.81, or 3%, to 2,176.84. About six stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.2 billion shares. The yield on the 10-year Treasury note, which moves opposite to its price, fell to 2.58% from 2.47% late on Tuesday.