Manufacturing figures lift Wall Street

The US Commerce Department said new orders for durable goods - which include manufactured goods such as cars and machinery - rose by 2.1% in June.

The increase was the biggest since January this year, and was much larger than expected.

The figure boosted investors' confidence about the strength of the US economy and on Wall Street the Dow Jones index ended the day up 172.06 points, or 1.9%, at 9,284.57.

The tech-heavy Nasdaq index rose 1.72% to 1,730.7 while the broader S&P 500 climbed 1.74% to 998.65.

Buying on the dips

Sentiment was also lifted by figures showing that sales of new US homes reached a record pace last month.

Sales of new single-family homes rose 4.7% to an annual rate of 1.16 million, confounding analysts' expectations of a fall in the rate.

" This is yet another encouraging sign for the economy "
Cary Leahey, Deutsche Bank Securities

"A lot of investors were worried about whether the economy is picking up," said Brian Williamson, an equity trader at the Boston Company Asset Management.

"But the (reports) were pretty good, so that gives investors a little confidence to get back into the market."

Analysts also said that investors had been looking to snap up shares following Thursday's late sell-off.

"Every time the market backs off, it seems like buyers come back in on the dip," said James Volk, managing director of equity trading at D.A. Davidson and Co.

"It's obvious people are looking for excuses to buy stocks."

Growth hopes

June's durable goods data was boosted by a 4.4% increase in orders for machinery - the largest rise for nearly a year - and a 2.2% increase in orders for cars.

Analysts said it was too early to say that manufacturing was definitely recovering, as durable goods figures can vary widely from month to month.

But the increase was welcomed as a positive move.

"This is yet another encouraging sign for the economy," said Cary Leahey, an economist at Deutsche Bank Securities.

The US economy grew at the sluggish annual rate of 1.4% during the first three months of the year, and economists are hoping growth will pick up in the coming months.

Last month the US Federal Reserve interest rates by a quarter-point to 1% in a further bid to boost the economy.

The first estimate of US growth during the April to June period is due to be released next Thursday.

RELATED INTERNET LINKS:
US Department of Commerce
The BBC is not responsible for the content of external internet sites