US manufacturing activity rises above crucial 50 mark
The closely-monitored Institute of Supply Management’s purchasing managers index rose to 52.9 in August, up from the 48.9 reported the previous month.
Any reading above 50 indicates expansion and is the latest sign that the recession may be coming to an end.
In the meantime, the National Association of Realtors said US home sales rose more than expected in July and reached the highest level in over two years.
The number of home sales agreed was up 12% from July last year.
Jonathan Basile, an economist at Credit Suisse, said both sets of data were “encouraging readings”.
However, stocks plummeted on Wall Street despite the positive reports. The Dow Jones industrial average fell more than 150 points in afternoon trading.
Across the Atlantic, the Chartered Institute of Purchasing & Supply’s monthly index of UK manufacturing fell to 49.7 in August from 50.2 in July.
The figures surprised many analysts who predicted a rise to 51.5, after growth was reported in July for the first time since April last year.
The news sent the FTSE 100 down by 60.85 points to 4,845.05.