The Dow ended the day modestly higher on the back of a report showing the service sector expanded more quickly than expected last month, coming as a rare bright spot amid a sea of gloomy economic data.
The Dow Jones Industrial Average, as quoted by foxbusiness.com, gained 26.5 points, or 0.22%, to 12128, the S&P 500 climbed 7.3 points, or 0.57%, to 1286 and the Nasdaq Composite rose 18.1 points, or 0.66%, to 2778.
The Institute for Supply Management's gauge of service-sector activity rose to 53.7 in May from 53.5 in April. Economists were expecting a reading of 53.5. Readings above 50 indicate expansion while those below 50 point to contraction. This strong reading comes on the heels of a weak factory orders report released earlier in the week and bleak jobs data revealed last week.
"While the soft employment report will be front and center of FOMC members' thoughts ahead of the June meeting, the tone of the ISM surveys in May ... should blur the debate on whether further policy easing is currently necessary," Peter Newland, an economist at Barclays Capital, wrote in a note to clients.
Indeed, the Federal Reserve has repeatedly said it sees the economy growing at a moderate pace despite the recent headwinds.
The Group of 7 industrial nations held a conference call on Tuesday about the increasingly gloomy state of many of the world's biggest economies. Growth in the U.S. and China appears to be slowing down, while Europe's economy is under heavy pressure from the debt crisis there.Disclosure: No position at the stock mentioned above.
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