Wall Street closed a dismal first quarter with a moderate gain today, rising after a reading on regional manufacturing came in better than expected.
The Chicago Purchasing Managers Index, considered a precursor to the National Institute for Supply Management manufacturing survey tomorrow, rose to 48.2 in March from 44.5 a month earlier.
Economists had been expecting a reading of 47.3, according to Dow Jones Newswires. Though the reading topped forecasts, a figure below 50 nonetheless indicates a contraction in manufacturing activity.
The market’s reaction, however, was likely not as enthusiastic as it might seem from gains by the major indexes. Volume was very light, which tends to skew price movements, and the final day of the quarter had some institutions buying more for show rather than on any conviction about the economy.
It has been a difficult quarter on Wall Street, with financial companies’ continuing credit market losses and the flagging economy wiping out investors’ appetite for stocks. While the market has seen a number of up days during the quarter, overall the first-quarter trend was sharply lower.
Investors also examined a government plan to overhaul the way Wall Street is regulated. Wall Street appeared unmoved by a speech from Treasury Secretary Henry Paulson on the plan to reorganise oversight of Wall Street; details of the 218-page plan have been widely reported in recent days.
It would give the Federal Reserve increased power to protect the stability of the entire financial system while merging day-to-day supervision of banks into one agency, down from five under the existing system.
According to preliminary calculations, the Dow rose 46.49, or 0.38%, to 12,262.89.
Broader stock indicators also rose. The Standard & Poor’s 500 index advanced 7.48, or 0.57%, to 1,322.70, and the Nasdaq composite index rose 17.92, or 0.79%, to 2,279.10.
Advancing issues outnumbered decliners by about three to two on the New York Stock Exchange, where volume came to 1.58 billion shares compared with 1.35 billion shares traded Friday.