Mark Duncan/AP/File
In this September 2012 file photo, Jack Knox positions a hot spindle being shape at Solmet Technologies in Canton, Ohio. US manufacturing activity rose sharply in September, and the good news buoyed world financial markets into the morning Tuesday, Oct. 2. 2012.

Markets buoyed by US manufacturing, but Spain is still a drag

Financial markets across the globe continued to ride the wave of good US economic news Tuesday morning, despite concerns in Greece and Spain. In the US, markets are poised for a strong opening, but analysts are waiting for key economic data to be released this week. 

Surprise good news from the U.S. continued to shore up financial markets Tuesday despite concerns about the economic outlook of both Greece and Spain.

In what will be a busy week for U.S. economic data, investors are assessing whether the world's largest economy may be getting over its recent soft patch.

The monthly manufacturing survey from the Institute for Supply Management on Monday pointed to an improvement. Its main index rose sharply to above 50, a reading that signals growth. The index had been below 50 from June through August.

Hopes that the U.S. is back in recovery mode has helped stocks and the oil price start the new month on a relative high. The week's economic news out of the U.S. culminates Friday with the monthly nonfarm payrolls report, which often sets the market tone for a week or two after its release.

"The ISM rose above the critical 50 mark in a surprise move yesterday thus creating a jamboree of good sentiment," said Carolin Hecht, an analyst at Commerzbank.

In Europe, the FTSE 100 index was up 0.1 percent at 5,827 while Germany's DAX rose 0.3 percent to 7,346. The CAC-40 in France was steady at 3,434.

Wall Street was poised for solid gains at the open too, with both Dow futures and the broader S&P 500 futures 0.4 percent higher.

The U.S. economy won't be the only point of interest this week. Once again, developments in Europe have the potential to halt any rebound in sentiment.

The main worry at the moment relates to whether Spain will ask for a financial bailout amid concerns that the German government is reluctant to push a vote in its Parliament.

"It is thought that Spain is prepared to request a bailout this weekend with the EU not intent on imposing much stricter conditions than the government have already announced," said James Hughes, chief market analyst at Alpari. "The only thing that could delay this is Germany's opposition to them requesting aid when it isn't the very last resort."

In addition, investors will be closely monitoring developments in Greece as the country's government is in talks with its debt inspectors over the latest batch of austerity measures. If the inspectors refuse to sign off on the measures, Greece faces the prospect of not getting its next batch of bailout funds, a development that may lead to its exit from the euro.

Despite the uncertainties surrounding its future, the euro remains fairly solid, trading a further 0.2 percent higher Tuesday at $1.2913.

Earlier, Asian trading was subdued as markets in Hong Kong, mainland China and India were closed for public holidays.

Japan's Nikkei 225 index shed morning gains to close 0.1 percent lower at 8,786.05 but Australia's S&P/ASX 200 gained 1 percent to 4,433 after the country's central bank cut its benchmark interest rate by a quarter percentage point in light of global growth concerns.

In the oil markets, benchmark oil for November delivery was up 35 cents to $92.83 per barrel in electronic trading on the New York Mercantile Exchange.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

QR Code to Markets buoyed by US manufacturing, but Spain is still a drag
Read this article in
QR Code to Subscription page
Start your subscription today