U.S. Stocks Close Higher on Manufacturing Data

Fed's industrial production numbers improve, though steady Empire State data disappoints

U.S. markets responded well on Wednesday to two manufacturing reports and news that import prices increased for the second consecutive month in August.

Stocks all closed higher, with the Dow Jones industrial average rising 46.24 points, or 0.44%, to 10,573. The Standard & Poor’s 500-stock index rose 3.97 points, or 0.35%, to 1,125.07, and the Nasdaq was up 11.55 points, or 0.5%, to 2,301.32.

The markets liked the Federal Reserve’s report on August industrial production and capacity utilization, which showed a 0.2% rise in production after a downwardly revised increase of 0.6% in July. The July revision stemmed primarily from new data on the output of iron and steel, construction machinery, paper, and pharmaceuticals.

“The step-down in the rate of increase reflected a fallback in the production of motor vehicles and parts, which had jumped sharply in July. Excluding motor vehicles and parts, manufacturing output increased 0.5% in August after having gained 0.2% in July,” the Fed reported.

But data from the New York manufacturing sector disappointed expectations.

The Empire State Manufacturing Survey released Wednesday by the Federal Reserve Bank of New York indicated that conditions held relatively steady in New York's manufacturing sector in September. The general business conditions index remained positive, although it slipped 3 points to 4.1.

Economists’ consensus was for an increase to a reading of 8, according to a Thomson Reuters poll.

Meanwhile, the Bureau of Labor Statistics reported Wednesdaythat U.S. import prices increased 0.6% in August after rising 0.1% in July. Higher fuel prices accounted for the lion’s share of the increase, with about 58% of the overall rise in import prices due to a 1.7% advance in fuel prices. Export prices rose 0.8% in August after declining 0.2% in July and 0.7% in June.

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