Stock Market Update

[BRIEFING.COM] The market responded with positive action to the latest data releases.

The ISM Services PMI increased to 53.5% in February (Briefing.com consensus 53.0%) from 52.8% in January. The dividing line between expansion and contraction is 50.0%, so the February reading reflects services sector activity expanding but at a faster pace than the prior month. February marked the 54th time in 57 months that the Services PMI indicated expansion.

The key takeaway from the report is that the pace of expansion in the nation's largest sector accelerated in February, taking a little edge off the market's growth concerns; however, the acceleration in activity was also accompanied by an acceleration in prices.

Factory orders increased 1.7% month-over-month in January (Briefing.com consensus 1.3%) following an upwardly revised 0.6% decline (from -0.9%) in December. Excluding transportation, factory orders rose 0.2% on the heels of a 0.3% increase in December. Shipments of manufactured goods jumped 0.4% in January following a 0.6% increase in December.

The key takeaway from the report is that it reflected not only a rebound in orders for nondefense aircraft and parts, but a nice pickup in business spending overall, evidenced by the 0.8% jump in new orders for nondefense capital goods excluding aircraft.