Stronger than expected growth in the service sector coupled with tame inflation gave investors hope Tuesday that the broader economy won’t follow manufacturing into a recession.
The national ISM services report came in at a much stronger-than-expected 58.9, and while third-quarter productivity was weaker than expected, tame wage growth in the report eased inflation fears and raised hope that the Fed may yet engineer a soft economic landing.
The news was good enough for another day of modest gains for stocks.
Comtechand Sycamorerose on their results.
MTMsoared 61% on an IT services contract win.
Netlogicfell on a downgrade, while Pricelinefell on news of more selling by Hutchison Whampoa.
Qualcommgained 4% a day after the company made two acquisitions. PMC-Sierrawas another rising on above-average volume.
The Nasdaq added 4 to 2452, the S&P 500 gained 5 to 1414, and the Dow rose 47 to 12,331. Volume declined to 2.76 billion shares on the NYSE, but rose to 2.08 billion on the Nasdaq. Advancers led 20-12 on the NYSE, and 16-15 on the Nasdaq. Upside volume was 62% on the NYSE, and 49% on the Nasdaq. New highs-new lows were 547-12 on the NYSE, and 212-38 on the Nasdaq.