UKX FTSE 100 Index

By Amrith Ramkumar and Avantika Chilkoti 

The S&P 500 climbed for the third consecutive session Wednesday, lifted by fresh signs of stability in the manufacturing sector and muted inflation.

The benchmark equity gauge added 0.6% and was on track to close at a four-month high after falling in every session last week. The Dow Jones Industrial Average climbed 113 points, or 0.4%, to 25668. The tech-heavy Nasdaq Composite rose 0.5%.

Renewed faith in U.S. economic growth and a patient approach by the Federal Reserve regarding interest-rate increases have powered this year's stock rebound, pushing the S&P 500 up 12% for the year and within 4.5% of its September record.

Data Wednesday showed demand for long-lasting goods produced by U.S. factories rose in January for the third consecutive month, a sign of momentum for manufacturers. And producer prices edged higher last month, the latest sign that underlying inflation pressures remain tepid and a positive development for investors hoping contained inflation will prevent the Fed from raising rates this year.

Despite slowing growth overseas, some analysts expect stable economic activity and the Fed's patient stance to keep markets supported moving forward following last quarter's rout.

"Things have generally by and large not been as bad as feared," said Christopher Mack, a portfolio manager who helps manage the Harding Loevner Global Equity Fund.

Bond yields stabilized after Wednesday's data, with the yield on the benchmark 10-year U.S. Treasury note climbing to 2.614%, according to Tradeweb, from 2.605% a day earlier. Yields rise as prices fall. They had dropped to a two-month low following Friday's weaker-than-expected hiring data.

Boeing shares also rebounded Wednesday, supporting the Dow industrials after the largest component in the price-weighted index tumbled to start the week. Several countries have suspended flights of the Boeing 737 MAX after the model was involved in a second deadly crash in less than five months on Sunday. The stock rose 0.4% Wednesday.

Shares of the aerospace company are still up 17% for the year despite their recent slide, part of a resurgence in cyclical stocks often tied to sentiment toward economic growth.

Wednesday's market rally was broad, with every S&P 500 sector climbing, led by the financial, energy and technology groups.

Some analysts remain concerned that slow economic activity overseas could ripple to the U.S. as trade talks between the U.S. and China continue. After the European Central Bank slashed its 2019 eurozone growth forecasts last week while unveiling new stimulus measures, uncertainty about the U.K.'s departure from the European Union has swung markets in recent days.

British lawmakers rejected a Brexit deal Tuesday, and the U.K.'s parliament was set to vote Wednesday on whether they want to leave the EU without a divorce deal. The U.K. also cut its forecasts for 2019 economic growth Wednesday to 1.2% from 1.6%.

"The questions surrounding China, the strength of the economy, the Chinese trade wars and Brexit all combined is particularly sensitive for Europe," said David Slater, a portfolio manager at London hedge fund Trium Capital.

The British pound trimmed some of its recent slide against the dollar Wednesday, and the U.K.'s FTSE 100 index edged higher.

The Stoxx Europe 600 inched up 0.3%.

Asian stocks were mostly lower, with the Shanghai Composite down 1.1%, Hong Kong's Hang Seng Index dipping 0.4% and Japan's Nikkei dropping 1%.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com and Avantika Chilkoti at Avantika.Chilkoti@wsj.com

(END) Dow Jones Newswires

March 13, 2019 10:59 ET (14:59 GMT)

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