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 0.9% and was on track to close at a four-month high after falling in every session last week. The Dow Jones Industrial Average climbed 172 points, or 0.7%, to 26727. The tech-heavy Nasdaq Composite rose 1%.

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.

Despite slowing growth overseas, some analysts expect stable economic activity and the Fed's cautious stance to keep markets supported moving forward. Wednesday's market rally was broad, with every S&P 500 sector climbing, led by the financial, industrial and technology groups.

"People are comfortable with the market," said Mohit Bajaj, director of ETF trading solutions at WallachBeth Capital. "The move this week has given a lot of people confidence."

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.

After worries about a sharp economic slowdown roiled markets last quarter, analysts have said data early in the year has pointed to more gradual weakness that won't drastically crimp revenue growth.

"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 2.610%, 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 halted their sharp slide, 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 wobbled between gains and losses and was recently down 0.2% Wednesday.

Shares of the aerospace company are still up 16% for the year despite their recent slide, part of a resurgence in cyclical stocks often tied to sentiment toward economic growth.

The recent rally in technology and internet stocks, with the S&P 500 information technology sector bringing its rise to nearly 4% this week with Wednesday's climb, has also given investors more confidence that stocks can keep advancing.

The market's most popular names from Amazon.com to Apple are now up 13% or more for the year, closing the gap on the rest of the sector.

"When those stocks perform well, it makes people think the market is in a strong position," Mr. Bajaj said.

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 was little changed.

The Stoxx Europe 600 added 0.6%.

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 14:07 ET (18:07 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
FTSE 100
Index Chart
Von Feb 2024 bis Mär 2024 Click Here for more FTSE 100 Charts.
FTSE 100
Index Chart
Von Mär 2023 bis Mär 2024 Click Here for more FTSE 100 Charts.