It's only been a day, but November on Wall Street is already looking a lot better than October.
Strong economic data and corporate news converged Thursday to give U.S. stocks their best day since mid-September. Positive signs about the job market and soaring sales figures pushed stock futures up before the market opened. A half-hour into trading, reports on manufacturing and consumer confidence added another log to the fire.
The Dow Jones industrial average had already risen 100 points when the mid-morning reports came out. The data — including news that manufacturing grew for the second straight month — pushed it up as much as 177 points. It fell back some, but held a steady gain for the rest of the day.
The Dow closed up 136.16 points, or 1 percent, to close at 13,232.62. It was the best day for the Dow since Sept. 13.
All three indexes fell in October, their first monthly losses since May.
The 10 a.m. surge came after the Institute for Supply Management said factories are seeing more new orders and increased production. The index has shown growth for the first two months of this quarter, an encouraging sign about the health of corporate America. Before that, manufacturing had decreased for three straight months.
The Conference Board said Americans' confidence in the economy surged last month to the highest level in nearly five years. Many were encouraged by an improving job market, the group said.
Traders watch manufacturing and consumer confidence because factories and consumers are crucial players in the economic recovery. Manufacturing lifted America out of recession, and the resurgent car industry has supported the economy during recent periods of weakness. Consumers, meanwhile, account for about 70 percent of economic activity. If they're not happy enough to spend, no one else has the buying power to take up the slack.
Manufacturing growth tends to signal higher corporate earnings, said Doug Cote, chief market strategist at ING Investment Management. U.S. companies are midway through reporting their third-quarter earnings, which have been relatively weak. If factories keep boosting their output, Cote said, earnings are more likely to bounce back in the fourth quarter.
"What you want to see is advancing corporate profits, broad manufacturing growth and strong consumer spending," Cote said. Cote said those factors, along with corporate earnings, set the tone for the market.
Also setting the tone Thursday was anticipation of the Labor Department's October jobs report, which is due out on Friday. Before trading began, the government said new applications for unemployment benefits fell 9,000 last week to a seasonally adjusted 363,000, a level consistent with modest hiring. Separately, payroll provider ADP said businesses added 158,000 jobs in October.
Those data are a warm-up for Friday's overall survey of the job market. The report will be watched closely by traders seeking clues about how well the U.S. economy is recovering. If the number is especially good or bad, it also could influence the outcome of next week's presidential election.
It was the second day of trading after Superstorm Sandy ravaged New York and forced markets to close on Monday and Tuesday. Companies that had postponed earnings announcements rushed to release their results.
The combination of better news on the economy and U.S. companies set stocks on a positive course. The upswing started with strong sales results from retailers and automakers. Chrysler had its best October in five years, with sales rising 10 percent, despite the three-day disruption caused by the storm.