US stocks sizzle on manufacturing data

NEW YORK: US stocks opened the new year with a bang on Tuesday, lifted by positive US, Chinese and eurozone manufacturing data.

After a solid start out of the blocks - thanks to better-than-expected Chinese and European manufacturing reports - US markets got a boost from news closer to home.

Data showed the US manufacturing sector expanded in December more quickly than markets had expected.

The Institute for Supply Management's manufacturing index hit 53.9 percent, an increase of 1.2 points from November for the fastest rate in six months.

The Dow Jones Industrial Average surged 179.82 points (1.47 percent) to finish at 12,397.38.

The tech-rich Nasdaq Composite jumped 43.57 points (1.67 percent) to 2,648.72, while the SandP 500, a broad measure of the markets, advanced 19.46 points (1.55 percent) to 1,277.06.

"Although off of the best levels of the day, US stocks remain nicely higher," said analysts at Charles Schwab.

Earlier on Tuesday, the Commerce Department also reported that US construction spending increased 1.2 percent in November, a better-than-expected rate.

The three major indices had closed the final session of 2011 on Friday in the red, but for the year the Dow was up 5.5 percent, while the SandP 500 was flat and the Nasdaq fell 1.8 percent as investors appeared to pause ahead of the extended New Year's holiday weekend.

Energy firms dominated company news.

US shares in British energy firm BP rose 3.3 percent after it sued contractor Halliburton for all costs related to the 2010 Deepwater Horizon oil disaster in the Gulf of Mexico.

Halliburton shares were down 1.0 percent.

Chesapeake Energy Corporation shares were up nearly six percent after it announced a joint venture with France's Total to exploit gas shale gas fields in the US state of Ohio.

News that Chinese oil and gas giant Sinopec will invest US$2.2 billion in Devon Energy, giving the Beijing firm a stake in exploring five US shale fields, sent Devon Energy's shares up 6.6 percent. -- AFP