Manufacturing news helps lift Dow 114 points

NEW YORK - The Standard & Poor's 500 index is four digits again.

The widely used stock market measure broke above 1,000 yesterday for the first time in nine months as reports on manufacturing, construction, and banking signaled that the economy is strengthening. The S&P is used as a benchmark for many mutual funds.

The major indexes rose more than 1 percent.

The market's July rally blew into August on the type of news that might have seemed unthinkable when stocks hit 12-year lows in early March. A trade group predicted U.S. manufacturing activity would grow next month, the government said construction spending rose in June, and Ford Motor Co. said its sales rose last month for the first time in nearly two years.

Yesterday, a report from the Institute for Supply Management, a trade group of purchasing executives, signaled U.S. manufacturing activity should increase next month for the first time since January 2008 as industrial companies restock shelves. Also, the Commerce Department said construction spending rose rather than fell in June as analysts had expected. The reports and rising commodity prices lifted energy and material stocks.

Reports from European banks eased concerns about the effect that the credit crisis and recession have had on the global banking system.

The Dow rose for the third day, advancing 114.95, or 1.25 percent, to 9,286.56.

The S&P 500 index rose 15.15, or 1.53 percent, to 1,002.63, its first move above 1,000 since Nov. 4. The index first closed above that mark in February 1998 and is up 48.2 percent since its recent low on March 9.

The Nasdaq composite index rose 30.11, or 1.52 percent, to 2,008.61, its first close above 2,000 since October.

Among banks, Barclays P.L.C. said its first-half net profit increased 10 percent. HSBC Holdings P.L.C. reported a 57 percent drop in its first-half profit, but results were better than anticipated.

Earnings reports have shown that companies are not losing money as fast as they were last fall and earlier this year. Though there are concerns that the aggressive cost-cutting measures businesses have undertaken to boost profits are not sustainable, forecasts in recent weeks from companies such as Intel Corp. and Caterpillar Inc. suggest conditions are improving.

News that manufacturing in China and Europe is expanding pushed commodity prices higher. Copper prices, which have nearly doubled this year thanks in large part to unrelenting demand from China, hit a 10-month high.

Light, sweet crude soared $2.13 to settle at $71.58 a barrel on the New York Mercantile Exchange.

The Russell 2000 index of smaller companies rose 9.07, or 1.63 percent, to 565.78.

Overseas, Britain's FTSE 100 jumped 1.6 percent, Germany's DAX index rose 1.8 percent, and France's CAC-40 rose 1.5 percent. Japan's Nikkei stock average slipped less than 0.1 percent.