Wall St up on refreshed growth bets

Trader Brandon Barb works on the floor of the New York Stock Exchange. File photo / AP

Wall Street moved higher after the latest data on steady manufacturing in the US and the euro-zone bolstered optimism about the outlook for global growth.

Last week US policy makers reminded investors it might raise interest rates at the Federal Open Market Committee meeting in December. Futures traders now see a 50 percent chance the Fed will increase rates in December, up from 33 percent a month ago, according to Bloomberg.

The recent data also kept alive those bets. A report by the Institute for Supply Management showed the US manufacturing index inched lower to 50.1 in October, the lowest level since May 2013, down from a 50.2 in September. Separately, Markit's US manufacturing purchasing managers' index increased to 54.1 this month, up from 53.1 in September.

"With the Fed eagerly watching the data flow to see whether the third quarter economic slowdown will intensify, the improvement in the manufacturing sector increases the odds of policymakers voting to hike rates at the FOMC's December meeting," Chris Williamson, chief economist at Markit, said in a statement.

"However, with inflationary pressures remaining very subdued and signs of the slowdown persisting into the fourth quarter in the larger service sector, the policy outlook is by no means certain and debate about whether the economy yet needs higher interest rates will no doubt remain intense," Williamson noted.

In New York trading at about 12.34pm, the Dow Jones industrial average gained 0.5 percent, while the Standard & Poor's 500 Index climbed 0.7 percent and the Nasdaq Composite Index added 1 percent. US Treasuries weakened.

"The global data today shows stable economic conditions, which is improving sentiment," Mark Luschini, chief investment strategist in Philadelphia at Janney Capital Management, told Bloomberg. "M&A activity is always a good litmus test for the sentiment of companies and usually speaks well to market conditions, and we've seen some big deals lately."

Advances in shares of Pfizer and those of Chevron as well as Exxon Mobil, last up 4.1 percent. 2.8 percent and 1.5 percent respectively, led the Dow higher.

Shares of Visa dropped, last 3.2 percent lower, after the company announced plans to buy Visa Europe for as much as 21.1 billion euros and reported disappointing quarterly earnings.

In Europe, the Stoxx 600 Index ended the session with a 0.3 percent increase from the previous close. France's CAC 40 Index rose 0.4 percent, while Germany's DAX Index rallied 0.9 percent, bolstered by earnings from Commerzbank. The UK's FTSE 100 Index barely budged from the previous close.

Here, a Markit Economics report showed euro-zone manufacturing edged higher in October, rising from a five-month low in September.

"There were some bright spots in the survey, however, with export orders showing the largest monthly gain for four months, which may help allay fears that weaker growth in China and other emerging markets is derailing the eurozone's recovery," Williamson noted.

European Central Bank President Mario Draghi, meanwhile, suggested policy makers might be less eager to add stimulus. Further stimulus remains an "open question," Draghi said in an interview with Italian daily Il Sole 24 Ore published October 31.