While you were sleeping: Consumer stocks rise as factory output increases

Stocks on Wall Street advanced as better-than-expected manufacturing data underpinned optimism about the outlook.

An Institute for Supply Management report showed its index of national factory activity climbed to 54.7 last month, a two-year high. 

"The economy is ending the year on a high note with even the manufacturing sector showing signs of faster growth," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters.

"It appears that President [Barack] Obama will be leaving his successor with a pretty good economy." 

Separately, a Commerce Department report showed construction spending rose 0.9% to US$1.18 trillion in November, the highest in more than a decade.

The Dow Jones Industrial Average rose 60.40 points, or 0.3%, to 19,942.16. The S&P 500 climbed 0.6% to 2270.75 and the Nasdaq Composite added 0.9% to 5477.00.

“We’re mildly positive for 2017 as a whole,” Supriya Menon, a senior multiasset strategist at Pictet Asset Management, told Dow Jones.

“You’ll have this downward pressure on” stocks from central banks scaling back stimulus, she says. “However, macro momentum should continue.”

Consumer-discretionary stocks were among the biggest gainers in the S&P 500, rising 1.3%. General Motors rose 5.5% and Ford Motor 4.6% after they issued stronger-than-expected December sales results.

Vehicle sales head for record year
Overall motor vehicle sales are headed toward an annual record for 2016. GM tallied a 10% gain in US auto sales for the month, while Ford sales crept up 0.1%.

Kohl’s rose 4.2% and Gap added 3.1%. Nike led gains in the Dow industrials, climbing 2.1%.

Oil prices ticked higher as the dollar fell and analysts said they expect US stockpiles declined last week.

Light, sweet crude for February delivery settled up 1.8%, at $US53.26 a barrel while Brent, the global benchmark, also gained 1.8% to $US56.46.

Government bonds were steady after minutes from the Federal Reserve’s December meeting showed central bankers grappling with “considerable uncertainty” about the new US administration’s possible impact on the economy.

The yield on the benchmark 10-year Treasury note was at 2.452% compared with 2.450% on Tuesday.

The US dollar pulled back after reaching its highest level Tuesday since 2002. The WSJ Dollar Index, which measures the currency against 16 others, was down 0.6%.

The Stoxx Europe 600 slipped 0.1% after entering a bull market, having climbed 20% from a previous low. The UK’s benchmark FTSE 100 index edged up 0.2% to its fifth consecutive record close, the first streak of that length since February 1998.

France’s CAC 40 Index rose 0.4% and Germany’s DAX Index slipped 0.1%.