New York Report: Dow and S&P hit fresh highs after data blip

THE DOW and the S&P 500 finished at record highs again last night after a closely watched read on US manufacturing was revised to show more strength than initially indicated.

After hours of confusion, the Institute for Supply Management officially corrected its earlier report to show that the pace of growth in the US manufacturing sector accelerated in May. Wall Street fell initially after the first report, with all 10 S&P 500 sector indexes down for the day at one point.

Yet by the close of play, the Dow Jones industrial average was up 26.46 points or 0.16 per cent, to 16,743.63. The S&P 500 gained 1.40 points or 0.07 per cent, to 1,924.97. But the Nasdaq Composite dropped 5.42 points or 0.13 per cent, to 4,237.20.

The ISM said its index of national factory activity rose to 55.4 last month from 54.9 in April, with the May figure just shy of the 55.5 expected by a Reuters poll of economists. The ISM had initially said the reading came in at 53.2, but it was corrected due to an error in applying the seasonal adjustments.

“The market has lately been focused more on the weak economic news and the bond market, but we saw a reversal of that today with the revised (ISM) numbers. We got a better number and the bonds are selling off," said Rick Meckler of Liberty View Capital Management.

“But it’s hard to move the market higher, considering we are fairly fully valued at this point.”

The CBOE Volatility Index gained 1.6 per cent but was still near the lows not seen since March 2013.