NEW YORK – The stock market started November on a strong note as investors reacted to an expansion in U.S. manufacturing last month.
The improvement came during what could have been a difficult month for the U.S. economy, with a partial government shutdown that lasted 16 days and a narrowly averted default on the U.S. government’s debt, which could have rattled financial markets.
“With what happened in the last two months, it’s amazing how strong this market has been,” said Bob Doll, chief equity strategist at Nuveen Asset Management.
The Institute for Supply Management reported that its manufacturing index increased to 56.4, the highest level since April 2011. That was better than the 55.1 figure economists were expecting, according financial data provider FactSet.
The Dow Jones industrial average rose 69.80 points, or 0.5 percent, to 15,615.55. The Standard & Poor’s 500 index rose 5.10 points, or 0.3 percent, to 1,761.64. The Nasdaq composite rose 2.34 points, or 0.1 percent, to 3,922.04.
The S&P 500 is up 23 percent so far this year, while the average annual return on the S&P 500 is around 8 percent. Stocks are also starting to look expensive by some measures. Investors are paying more than $16 for every $1 of earnings in the S&P 500, the highest that ratio has been since February 2011.
“I don’t think this market is cheap by any means,” said Brad McMillan, chief investment officer for Commonwealth Financial. “We’ve been urging caution for some time now.”
In the bond market, the yield on the 10-year Treasury note rose to 2.62 percent from 2.56 percent.
On Friday morning, the Nasdaq’s options market was halted due to a technical glitch. Regular stock trading was not affected.
Among stocks making big moves: The Container Store more than doubled on its first day of trading on the New York Stock Exchange. The stock soared $18.20 to $36.20; First Solar jumped $8.83, or 18 percent, to $59.14.