By Carlos Guillen
Equity markets are making an incredible move to the upside in today's trading session, with the Dow Jones Industrial Average reaching 14,286 or up close to 1.2 percent, representing an all time intraday high and on pace to exceed its record closing level, of 14,164 on October 2007.
Part of today's enthusiasm came from a better than expected non-manufacturing sector result. Just as data from the Institute for Supply Management (ISM) showed last week that U.S. economic activity in the manufacturing sector (PMI) expanded in February for a third consecutive month, landing better than expected, ISM data posted today showed that economic activity in the non-manufacturing sector (NYSE:NMI) continued expanding during the same time period. The Non-manufacturing ISM Index in February clocked in at 56.0 percent, increasing from the 55.2 percent reported for January and landing above the 55.4 percent consensus estimate. The result also represented the 38th month of consecutive growth.
Perhaps a bit discouraging was that employment activity in the non-manufacturing sector decreased a bit to 57.2 from 57.5 percent, indicating growth in employment for the seventh consecutive month, at a slightly lower pace. Moreover, of the ten available components of NMI, seven non-manufacturing industries reported growth In February. And while respondents' comments were mixed about the economy and business conditions, the majority of respondents were optimistic about the overall direction.
Also encouraging investors today was news that China has left its economic growth target for the year unchanged at 7.5 percent, as it looks to expand at a steady pace and maintain social stability. The Chinese government also pushed a 2013 budget that incorporates a 10 percent increase in government spending, clearly great for investors.
Over in the euro-zone, services output shrank less than initially estimated in February, giving hope that the region's economy may be beginning to emerge from a recession. According to London-based Markit Economics, the index of purchasing managers in the euro-area services industry fell to 47.9 from 48.6 in January, which was above an initial estimate of 47.3.
So clearly today is an overall wonderful day for stocks, and at the moment we're all system go to finish today's trading session at all time highs.