Stocks surge on strong manufacturing numbers

NEW YORK -- Investors sent stocks surging Monday, propelling the Dow Jones industrials up more than 115 points and into the shadow of 10,000 after a pair of reports showed better-than-expected growth in the nation's manufacturing sector and construction spending. Retail stocks dipped although stores had solid sales over the Thanksgiving weekend.\nInvestors returned to the market with enthusiasm following a holiday week of lighter trading, and the manufacturing report from the Institute for Supply Management contributed to their zeal, said Todd Leone, managing director of equity trading at SG Cowen Securities.\n"I think a lot of people were off last week, so they're coming in and buying today," Leone said. "Construction spending was good, but these ISM numbers have really pushed the market up."\nAccording to preliminary results, the Dow closed up 116.59, or 1.2 percent, at 9,899.05, following a gain last week of 1.6 percent. The last time the index of 30 actively traded blue chip stocks closed higher was May 31, 2002, when it ended the day at 9,925.30; it last closed above 10,000 on May 24, 2002.\nThe Nasdaq composite index closed at its highest point in nearly two years, up 29.56, or 1.5 percent, at 1,989.82, following a weekly gain of 3.5 percent. The tech-dominated index last closed higher on Jan. 15, 2002, at 2,000.91.\nThe Standard & Poor's 500 index also reached a significant high, rising 11.92, or 1.1 percent, to close at 1,070.12, after gaining 1.5 percent last week.\nThe S&P last closed higher on May 28, 2002, when it stood at 1,074.55.\n"The last two months of the year are traditionally a strong seasonal period for the market, and we've had a strong 10 months going into it," said Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn. "All in all, the markets are moving to new recovery highs here."\nManufacturing grew for a fifth straight month, according to the ISM report, boding well for the overall economy in the final quarter of the year. The industry group's manufacturing index rose to 62.8 last month from 57 in October.\nAn index reading above 50 indicates expansion; one below 50 indicates that manufacturing activity is contracting. From March through June, the manufacturing index was below 50.\nSeparately, the Commerce Department reported construction spending registered its best month on record in October, a promising sign for the recovery's staying power. The total value of building projects in October came in at a seasonally adjusted $922 billion -- a 0.9 percent increase over the previous month. Analysts had forecast a rise of 0.6 percent.\nInvestors were also keeping a close eye on retailers following the Thanksgiving weekend. Merrill Lynch called the weekend "a relative success," with interested consumers, planned promotions and reasonable weather, and predicted the retailing group would continue to perform well.\nBut Goldman Sachs was cautious on retailing bellwether Wal-Mart Stores Inc., noting that heavy consumer spending in the fourth quarter could result in some pullback early next year. Wal-Mart closed down $1.14 at $54.50, despite reporting that sales at its stores over the holiday weekend were up 6.3 percent compared to last year.\nBoeing Co. ended the day down 37 cents at $38.02 after chairman and chief executive Phil Condit, announced plans to resign. Condit's resignation from the aerospace manufacturer came just days after two other Boeing officials were fired for an alleged ethics breach.\nWalt Disney Co. rose 8 cents to $23.17, following news that vice chairman Roy E. Disney had stepped down from the board of directors and called on chairman and chief executive Michael Eisner to resign. Disney's board had informed the 73-year-old nephew of the company's founder that he would not be recommended for another term, as he is over the mandated retirement age of 72.\nDuPont Co. gained $1.24 to close at $42.70 after declaring that it would take aggressive actions to ensure its global competitiveness as a science company. DuPont said it was looking to cut costs by about $450 million next year and $900 million in 2005, in part through job cuts.\nInternational Business Machines Corp. gained 47 cents to close at $91.01 after announcing plans to reorganize its $13.1 billion software business.\nAdvancers outnumbered decliners more than 3 to 1 on the New York Stock Exchange. Volume was 1.34 billion shares, ahead of the 491.10 million shares traded Friday, when the market closed at 1 p.m. for the holiday weekend.\nThe Russell 2000 index, which tracks smaller company stocks, ended the day up 8.08, or 1.5 percent, at 554.59.\nOverseas, Japan's Nikkei stock average finished 3.0 percent higher Monday. In Europe, France's CAC-40 closed up 1.9 percent, Britain's FTSE 100 gained 1.6 percent and Germany's DAX index rose 2.0 percent.