Signs of strengthening in the U.S. manufacturing sector — including among apparel and textile producers — gave a jolt to investors on Wall Street and in Europe today.
The S&P 500 Retailing Industry Group was up 0.3 percent, or 2.15 points, to 657.61 with less than an hour of trading left, and the Dow Jones Industrial Average was ahead 0.7 percent, or 90.79 points, to 13,527.92.
The gainers included The Bon-Ton Stores Inc., up 8.5 percent to $10.31; Vera Bradley Inc., 3.1 percent to $24.60; Macy’s Inc., 2.8percent to $38.66; Estée Lauder Companies Inc., 2.7 percent to $63.26; Ross Stores Inc., 2.6 percent to $66.25.
U.S. manufacturing activity expanded for the first time in four months in September, according to the Institute of Supply Management. The group’s PMI rose to 51.5 percent for last month, up from 49.6 percent in August. A reading over 50 percent indicates growth manufacturing.
Although most apparel bought in the U.S. is made overseas, the manufacturing report showed U.S.-made fashions are regaining some traction.
Of the 11 manufacturing sectors seeing growth, textile mills showed the strongest expansion and apparel, leather and allied products ranked fifth. Apparel producers saw growth in new orders and production and decreases in inventory.
Backlogs, however, were down in September and employment in the sector fell, ISM said. And apparel producers said their customers’ inventories were too high.
European stocks were also on the rise.
The FTSE MIB in Milan was the strongest market, gaining 2.8 percent to 15,523.10, followed by the CAC 40 in Paris, which climbed 2.4 percent to 3,434.98. The DAX in Frankfurt expanded 1.5 percent to 7,326.73 and the FTSE 100 in London gained 1.4 percent to 5,820.45.
Retail and luxury stocks echoed the upward trend, with the day’s biggest gainers including Mulberry, which rose 7.3 percent to 12.01 pounds; LVMH Möet Hennessey Louis Vuitton, 3.1 percent to 120.60 euros; Tod’s, 3.6 percent to 87.15 euros; Geox, 2.4 percent to 2.11 euros, and Compagnie Financière Richemont, 2 percent to 57.50 Swiss francs.
The pound traded for $1.62 against the dollar as the euro traded for $1.29 and the Swiss franc for $1.06.
Despite the day’s stock gains, Europe’s economic outlook continues to be dreary.
Unemployment in the euro zone hit a new high of 18.2 million in August, according to the EU statistic agency Eurostat. The highest rate was in Spain, which registered a 25.1 percent rate of unemployment compared with the overall 11.4 percent in the euro zone. The lowest rate was in Austria, where unemployment stood at 4.5 percent.
And Markit Purchasing Managers’ Index showed that manufacturing output in the region declined in September, but at a slower rate than in August.
Manufacturing the euro zone has fallen for 14 consecutive months.