US close: Stocks close higher as investors weigh US factory orders data
US stocks ended higher as a weaker-than-expected report on factory orders made the case for an interest rate hike by the Federal Reserve this year seem less likely.
The Dow finished up 89 points to 17,918, the Nasdaq rose 18 points to 5,145 and the S&P 500 increased six points to 2,110.
According to figures released by the Commerce Department, factory orders declined 1% in September compared with analysts’ expectations for a 0.9% drop.
Meanwhile, August’s figures were downwardly revised to show a 2.1% increase compared with the 1.7% rise that was initially reported.
“Given the relatively small revisions to durable goods data, this morning’s report provides little new signal on the state of US manufacturing,” according to Barclays Research analysts.
“Demand for many categories of manufactured goods continues to struggle from the effect of a stronger dollar, weak foreign demand and lower energy prices.”
While the Fed is taking into consideration a wide range of economic data releases in determining the timing of its first interest rate increase in nearly a decade, the main event will be Friday's non-farm payrolls.
“This divergence between the most recent economic data and the Fed’s view on the US economy has only served to deepen the uncertainty investors have about how the US central bank is seeing the US economy,” said CMC Markets’ chief market analyst Michael Hewson.
In company news, videogame maker Activision Blizzard jumped after it unveiled plans to buy Candy Crush Saga maker King Digital Entertainment for $3.4bn in cash plus debt.
Amazon declined as it opened its first ever physical store and introduced parental leave for staff who have children.
King Digital surged, while Molson Coors Brewing fell after the Financial Times reported the brewer was negotiations with joint venture partner SABMiller to acquire a majority stake in MillerCoors.
US-listed of oil giant Royal Dutch Shell climbed after the group said it expects synergies from its planned $70bn takeover of BG Group to be 40% higher than originally estimated.
Among the companies that reported ahead of the bell, agricultural commodities manufacturer Archer Daniels Midland slumped after its third quarterly profit and revenue fell more than expected, while cereal manufacturers Kelloggs dropped after revealing its third-quarter earnings fell 8.5% amid costs related to its turnaround efforts and other one-time items.