Stocks move up despite profit taking

US STOCKS ended higher on the first day of the third quarter yesterday, supported by signs of strength in manufacturing and construction sectors. But the major US stock indexes pulled back from session highs late in the day as investors sold shares to book profits.

The S&P 500, which rose as much as 1.27 per cent earlier in the day, ended just 0.54 per cent higher. But the gains followed the S&P’s rally of 12.6 per cent in the first six months of the 2013. That marked the strongest first half of the year since 1998 for the benchmark S&P 500.

“We’ve had a couple days of pretty good moves, and on Friday and today, you’ve had some intraday profit-taking,” said Rick Meckler of hedge fund, LibertyView Capital Management LLC.

Wall Street has been showing signs of stabilisation in the past week after a selloff that was triggered by concerns that the Federal Reserve’s bond-buying policy, which has partly fueled this year's rally in equities, would end sooner than expected.

The day’s early rally was triggered by data from the Institute for Supply Management that showed US manufacturing activity grew in June, rebounding from an unexpected contraction in May. Construction spending neared a four-year high in May, according to the Commerce Department.

The Dow Jones industrial average rose 65.36 points, or 0.44 per cent, to close at 14,974.96. The Standard & Poor’s 500 Index advanced 8.68 points, or 0.54 per cent, to finish at 1,614.96. The Nasdaq Composite Index gained 31.24 points, or 0.92 per cent, to end at 3,434.49.