Stocks rise after data shows more stable manufacturing activity, rise in pending home sales
By MADLEN READ and IEVA M. AUGSTUMS
AP Business Writers
(AP) 05:41:56 PM (ET), Wednesday, July 1, 2009 (NEW YORK)

Investors kicked off the stock market's third quarter with a moderate gain after getting some reassuring data on manufacturing and housing.
The Dow Jones industrial average rose by 0.7 percent Wednesday, rebounding from the previous day's selloff that was triggered by a drop in consumer confidence. Other indexes made moderate advances as well.
The buying was tempered by caution ahead of Thursday's June jobs report.
"That's going to be the big one," said Chris Johnson, president of Johnson Research Group. "People are keeping their eye on the unemployment figure."
The Labor Department is expected to report another uptick in the unemployment rate to 9.6 percent, according to economists surveyed by Thomson Reuters. Growing unemployment has been keeping investors nervous about consumer spending _ a major driver of growth.
Much of Wednesday's data was positive, including a report showing more stable manufacturing activity in the United States, and another indicating the fourth straight monthly rise in pending home sales. Stocks also got a boost from European markets, which rose following similarly upbeat manufacturing data in that region.
Not all of the economic news was upbeat, however. Construction spending fell in May by more than the market expected, and according to the ADP National Employment Report, the private sector lost more jobs in June than anticipated.
Some of Wednesday's bounce may simply have been due to stocks appearing cheaper following Tuesday's drop and investors looking to put money to work as the new quarter began.
"Some of the buying that wasn't done yesterday is being done today," said Richard E. Cripps, chief market strategist for Stifel Nicolaus, adding that he was surprised by Wednesday's upward move. "There isn't a lot of convincing volume here to read too much into this."
The Dow rose 57.06, or 0.7 percent, to 8,504.06. It climbed as high as 8,580.47 in earlier trading, but then pared its gains as the day went on.
The Standard & Poor's 500 index rose 4.01, or 0.4 percent, to 923.33. The Nasdaq composite index rose 10.68, or 0.6 percent, to 1,845.72.
Scott Fullman, director of derivatives investment strategy for WJB Capital Group, said the employment report _ along with thin, pre-holiday trading volumes _ could make for a volatile market Thursday. U.S. markets are closed Friday in observance of the July Fourth holiday.
Nonetheless, investors remain optimistic that the economy will be in better shape by the end of the year. "The belief is the worst is behind us," Fullman said.
About three stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to a lower-than-usual 4 billion shares.



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