US open: Stocks rise on better-than-expected US data

The Dow Jones Industrial Average rose 0.61%, the Nasdaq increased 0.97% and the S&P 500 gained 0.76% at 1516 GMT.

Markit’s US manufacturing purchasing managers’ index was revised higher than expected in February to a reading of 51.3 from a previous estimate of 51.0. The index was a touch higher than analysts’ forecasts of 51.2 but marked a slowdown from 52.4 in January. A reading above 50 signals expansion while a reading below that indicates a contraction.

The Institute of Supply Management’s PMI on manufacturing rose to 49.5 in February from 48.2 in January, beating analysts’ estimates of 48.5.

US construction spending data also surpassed forecasts. Spending increased by 1.5% on the month to a seasonally-adjusted rate of $1.14bn in January, compared to economists’ expectations for a 0.4% rise, the Commerce Department revealed.

In China, the official manufacturing PMI dropped to 49.0 in February from 49.4 in January, surprising analysts who had expected no change.

Caixin’s PMI on manufacturing was released the same day, also showing a worse-than-expected drop. The PMI fell to 48.0 in February from 48.4 in January. Economists had pencilled in an unchanged reading.

However, analysts continued to cheer Monday’s decision by China’s central bank to cut the required reserve ratio (RRR) for banks by 50 basis points.

Meanwhile, oil prices snapped the rally with Brent crude falling 0.55% to $36.37 per barrel and West Texas Intermediate crude rising 0.23% to $33.83 per barrel at 1522 GMT.

“Whilst a reversal of Brent Crude’s $37 per barrel-eyeing growth briefly threatened the global gains a better than expected pair of US manufacturing PMIs gave the market a shot in the arm, ensuring the muscular gains from the morning continued,” said Connor Campbell, financial analyst at Spreadex.

New York Federal Reserve President William Dudley on Monday said he remained cautious about raising interest rates in the near term as weaker oil prices weigh on inflation, potentially setting off slowdown in economic growth.

On the company front, Hertz Global was firmer after the car rental company said it swung to a profit in the fourth quarter.

Valeant Pharmaceuticals shares rose, bouncing back from huge losses in the previous session after it confirmed it was under investigation by the Securities and Exchange Commission and withdrew its financial guidance for 2016.

SunEdison tumbled after the renewable energy developer delayed the release of 2015 results, in part due to an internal inquiry over the accuracy of its financial status.

Marathon Oil was also in the red after saying it plans to sell as much as $1.23bn of stock to strengthen its balance sheet. Intercontinental Exchange, which owns the New York Stock Exchange, will likely be in focus after confirming it is considering making a bid for London Stock Exchange to rival Deutsche Boerse’s.

Marvell Technology Group jumped after the semiconductor company said it “no fraudulent activity” following an investigation into accounting and internal control matters.

The dollar rose 0.25% against the euro, fell 0.15% against the pound and increased 0.93% against the yen.