US close: Stocks end session in the green following solid manufacturing data

Wall Street stocks closed higher on Tuesday following a sharp sell-off in the previous session, driven by some stronger than expected manufacturing data.

At the close, the Dow Jones Industrial Average was up 0.55% at 30,391.60, while the S&P 500 was 0.71% firmer at 3,726.86 and the Nasdaq Composite saw out the session 0.95% stronger at 12,818.96.

The Dow closed 167.71 points higher on Tuesday, cutting into losses recorded in the previous session.

Yesterday's sell-off was driven by today's Georgia runoff elections, which will ascertain whether or not the Republican Party can hold on to control in the US Senate, with fears that increased tax rates and more progressive policies could weigh on markets if Democrats gain control of the Senate weighing on sentiment.

England's move to impose a third Covid-19 lockdown amid worries of a more transmissible variant of the coronavirus has also rattled markets, with New York state confirming its first case of the new strain on Monday.

The US has now recorded more than 21.35m cases of the coronavirus, claiming the lives of 362,194 Americans in the process.

On the macro front, the Institute for Supply Management's New York index surged 17.1 points to 61.3 in December, gaining back most of the loss reported in November. As a result of the sharp improvement in current business conditions, the six-month outlook index also grew to a 16-month high of 70.7 points.

Elsewhere, manufacturing activity rose to its highest level in more than two years in December, according to the Institute for Supply Management, as last month's index of national factory activity rebounded to 60.7 - the highest level since August 2018. Expectations on the Street were for a print of 56.6, down from 57.5 in November, with much the surprise rebound in the index due to an increase in the survey's measure of supplier deliveries to a 67.6 from 61.7.

In corporate news, GM saw domestic sales rise 4.8% in the last three months of 2020 as retail sales for the auto industry as a whole returned to pre-pandemic levels in Q4.