Benchmarks closed in the green on Monday as U.S. manufacturing activity rebounded in January and heavyweight technology shares gained. Investors turned to positive news and shrugged of coronavirus fears.
The Dow Jones Industrial Average (DJI) rose 143.78 points or 0.5%, to close at 28,399.81 and the S&P 500 rose 23.40 points or 0.7% to close at of 3,248.92. While, the Nasdaq Composite Index closed at 9,273.40, gaining 122.47 points or 1.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 4.6% to close at 17.97. Advancing issues outnumbered declining one for a 1.99-to-1 ratio on the NYSE and a 2.01-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
Fears of coronavirus outburst has been weighing on investors sentiment and dragging the major benchmarks lower in the past week. Ten of the 11 major S&P 500 sectors gained, however with the drop in crude price the energy sector lagged.
Overall, the S&P index recorded 24 new 52-week highs and 9 new lows. On the other hand, Nasdaq recorded 54 new highs and 66 new lows.
U.S. Manufacturing Activity Rebounds in January
According to the Institute for Supply Management’s (ISM) report on Monday, the U.S. manufacturing sector grew in January to 50.9, beating the consensus estimate of 48.6. The figure is a 3.1% increase from the seasonally adjusted December reading of 47.8. Easing of trade tensions with China and signing of a new trade deal with Mexico and Canada effectively boosted manufacturing activities.
There has been a surge in new orders that had been contracting from five straight months. Manufacturing accounts to 11% of the U.S. economy and a reading above 50 indicates expansion in the sector. The sub-indexes showed substantial growth as ISM’s forward-looking new orders rose to 52.0, the highest since May 2019. Additionally, ISM’s factory employment index picked up to 46.6 in January, the sector