Shares of DuPont Co. rose 4.6 percent on Monday - topping the Dow Jones industrial average and landing at No. 2 on the S&P 500 - as traders applauded the decision by Institutional Shareholder Services (ISS), a Maryland-based advisory firm, to back billionaire activist Nelson Peltz's antimanagement campaign to join the Wilmington industrial giant's board.

"The dissidents are onto something in their critique," ISS said in a report questioning DuPont's sales and profits record.

ISS backed Peltz, founder of Trian Fund Management L.P., which manages $10 billion in assets, and his ally John Myers, an ex-GE Capital executive, for seats on DuPont's 12-member board. Shareholders are voting by mail and at the May 13 annual meeting.

"This is a victory for Peltz," Charles Elson, a finance professor who heads the corporate governance center at the University of Delaware, told me. "ISS will swing 20 to 40 percent of a vote. In a close case like this, that's quite significant."

DuPont boss Ellen Kullman has used last week's quarterly earnings report and near-daily letters to shareholders to defend her record of cutting costs and spinning off businesses. But Peltz says DuPont repeatedly fails to meet its own sales and profit targets, and needs to reconsider its complex business mix and management.

"The fact they buy his story is not helpful to DuPont," Elson added. "It's a big shot in the arm for Peltz."

ISS withheld endorsements for four DuPont directors targeted by Peltz, including lead director Alexander Cutler, chief executive of Eaton Corp. Nor did it back two other insurgents supported by Peltz. ISS did approve votes for Kullman and seven Kullman-backed candidates, including former Tyco International boss Edward Breen, and founding-family descendant Eleuthere I. du Pont.

In earlier talks, DuPont had said it could accept GE veteran Myers on the board, but not Peltz.

ISS disputed Kullman's claim to credit for DuPont's recent share price increases, noting its value since Trian began pushing for change has been "disconnected from financial performance," and that earnings per share are down since 2011. DuPont has been "unable to address the hard truths these things reveal about the present" or to "manage the business more accountably," ISS said.

In a statement, Peltz called himself "deeply gratified" and repeated his call for shareholders to sign gold-colored proxy cards backing him and his allies. Trian has posted its critique of DuPont at

DuPont replied in a statement that ISS made a "wrong" endorsement and is "ignoring the success of our transformative strategy and the value-destructive nature of Trian's breakup agenda." (Kullman supporters are mailing in white cards backing incumbents.)

DuPont seeks to paint Peltz as a threat to science research who would raid the company for quick gains and burden it with debt.

ISS said Peltz is right to question how well DuPont is using R&D, after prior cuts, to build products that boost sales.