Investing.com - U.S. stocks rebounded on Tuesday as investors bet that a dismal January factory barometer released on Monday may be the product of rough winter weather that put commerce on hold and not due to softening demand.
At the close of U.S. trading, the Dow Jones Industrial Average rose 0.47%, the S&P 500 index rose 0.76%, while the Nasdaq Composite index rose 0.86%.
Stocks took a nosedive on Monday after the Institute for Supply Management said its manufacturing index fell to a seven-month low in January.
The ISM’s manufacturing purchasing managers’ index came in at 51.3 in January, down from 57.0 in December.
Analysts were expecting the index to inch down to 56.4 in January.
The report added new order growth fell at its fastest rate in 33 years, with the new orders index dropping to 51.2 from 64.4 in December. The employment index fell from 55.8 in December to 52.3, the weakest since June.
Also on Monday, U.K.-based Markit Economics reported that its U.S. manufacturing PMI came in at a three-month low of 53.7 for January, missing expectations for a 53.8 reading.
By Tuesday, stocks rebounded on expectations that rough winter weather including blizzards and frigid temperatures across much of the U.S. may have disrupted commerce.
Markets remained eager to see how a less weather-sensitive report on the U.S. service sector report due out on Wednesday will come in coupled with Friday''s jobs report.
Elsewhere, the Commerce Department reported earlier Tuesday that U.S. factory orders fell 1.5% in January, better than expectations for a decline of 1.7%.
Separately, Microsoft shares rose on news the company named its top cloud computing executive Satya Nadella as its new CEO.
On the earnings front, investors applauded fourth-quarter reports from fast-food retailer Yum Brands and fashion accessory retailer Michael Kors Holdings, though J.C. Penney disappointed with soft same-store sales data.
Leading Dow Jones Industrial Average performers included Merck, up 2.71%, DuPont, up 2.43%, and Pfizer, up 2.39%.
The Dow Jones Industrial Average''s worst performers included United Technologies, down 1.15%, Boeing, down 0.95%, and UnitedHealth, down 0.57.%.
European indices, meanwhile, finished mixed.
After the close of European trade, the EURO STOXX 50 rose 0.03%, France''s CAC 40 rose 0.24%, while Germany''s DAX 30 fell 0.64%. Meanwhile, in the U.K. the FTSE 100 finished down 0.25%.
On Wednesday, the U.S. is to release the ADP report on private-sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service-sector activity, which markets hope will shed light as to how inclement weather has been affecting economic indicators.
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