US stocks positive on first day of Q3

US stocks climbed on positive ISM manufacturing data. The ISM Manufacturing Index monitors employment, production inventories, new orders and supplier deliveries. The increase of ISM is a indicator of stronger economy and is supposed to lead stock prices up.

The S&P 500 index advanced by 0.75% at 15:10 pm London time. Meanwhile, Dow Jones Industrial average also gained around 1.05%.

“The U.S. market is very resilient,” Tom Walker, head of U.S. equities at Martin Currie Investment Management Ltd., said by phone for Bloomberg. “It has been really strong in the first half of the year, and there’s scope for even more recovery from the weakness following Bernanke’s comments.

Data issued last week in the U.S. showed consumer spending rebounded in May offsetting the largest drop in more than three years. Household purchases, which account for about 70% of the economy, recorded gains of 0.3% after decline with the same amount previous month. Incomes advanced 0.5%, beating projection. This avalanche of positive data rallied the economy to a third day of significant gains almost erasing previous retreat. US initial job claims reduced to 346 000 almost meeting the estimates with a slight difference of 1000 claims. First quarter GDP report for US missed estimates which led investors to speculate about government reducing the bond-purchasing program.

Volatility could be higher than usual this week, with low trading volumes during the trading week exaggerating any moves. U.S. markets are closed Thursday for the Independence Day holiday. The week is most likely going to be marked by Friday’s report on non-farm payrolls for month of June. Some of the stocks to watch this week include Apple as company is taking steps to registering iWatch trademark in Japan, BlackBerry which is struggling with its flagship smartphone sale, and HTC Corp which is due to post earnings this week.