September 1st, 2010
10:35 PM ET

Bright economic outlook boosts stocks, oil prices

A look at highlights from the day's business news:

September surprise: Stocks soar

The bulls are back on Wall Street. After a bearish August, stocks roared into September with a major rally Wednesday, as investors cheered signs of strength in the manufacturing sector.

The Dow Jones industrial average (INDU) gained 256 points, or 2.2 percent. The S&P 500 (SPX) soared 31 points, or 2.9 percent. The Nasdaq (COMP) composite rallied 63 points, or 3 percent.

Stocks rallied right out of the gate as investors welcomed a rebound in Chinese manufacturing and robust economic growth in Australia. The advance kicked into high gear following an unexpectedly strong report on U.S. manufacturing activity.

Oil roars into September 'like a lion'

After ending August in a slump, oil prices surged into September, rallying nearly 3 percent Wednesday as the economic outlook brightened.

"August was the worst month for oil since last May, with oil bulls really getting beat up as economic data started to turn South," said said Phil Flynn, a senior market analyst at PFG Best. "But we went out of August like a lamb and into September like a lion."

Disappointing reports on housing, jobs and economic activity dragged oil prices 9 percent lower last month as investors worried about the health of the economy and global demand for oil.

But sentiment took a turn for the better on the first day of September, with oil prices rebounding after a better-than-expected report on manufacturing eased jitters.

Treasurys fall on upbeat manufacturing data

Investors eased away from safe-haven Treasurys Wednesday, sending prices lower and yields higher after strong manufacturing data out of both the U.S. and China spurred optimism about the global economy.

In late trading, the benchmark 10-year note yielded 2.58 percent, up from 2.48 percent late Tuesday. The shorter term 2-year note yielded 0.51 percent, the 5-year note yielded 1.41 percent, and the 30-year bond yielded 3.65 percent.

A report showed U.S. manufacturing grew in August for the 13th consecutive month, at a faster pace than economists had expected. The report further curbed the safe-haven appeal of government debt, lending more impetus to an already downward trend for bond prices Wednesday.

- CNNMoney.com reporters Annalyn Censky, Blake Ellis and Ben Rooney contributed to this report.

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Filed under: Economy
soundoff (6 Responses)
  1. dave Richman

    Bright today and dark tomorrow. The girlyman traders run for cover every-time someone yells SELL. The stocvk market is not the predictor of the economy in 6 months, it is in stead the reaction to the news of 6 minutes ago.

    September 2, 2010 at 9:02 am | Report abuse |
  2. kaye

    lmao....whatever!!

    September 2, 2010 at 10:52 am | Report abuse |
  3. chris

    i have heard this story at least a dowen times in the last year....these stories are intended to rebuild trust in the economy......

    September 2, 2010 at 10:57 am | Report abuse |
  4. andy

    "hey we might get back on our feet somewhat, financially. better raise oil prices." supply and demand my butt. supply hasn't gone down and demand isn't up yet the prices fluctuate like the weather in kentucky.

    September 2, 2010 at 11:13 am | Report abuse |
  5. Darte

    The people playing in this market must be pretty smart we gave them billions of dollars in our money.

    September 2, 2010 at 5:08 pm | Report abuse |
  6. Falukhan

    August posted the worst numbers for home sales, car sales and other retail sectors. Momentum just doesn't come out of nowhere. Where is the true economic leadership?

    September 2, 2010 at 7:41 pm | Report abuse |