* ISM manufacturing expands more than expected in December
* China, India manufacturing surveys help commodities
* Chip stocks rise after Intel upgrade
* Dow up 1.5 pct, S&P up 1.6 pct, Nasdaq up 1.7 pct
* For up-to-the-minute market news, click STXNEWS/US
(Updates to mid-afternoon, changes byline)
By Edward Krudy
NEW YORK, Jan 4 (Reuters) - U.S. stocks climbed in a
commodities-fueled rally on Monday after data showed the
manufacturing sector expanded for a fifth straight month,
lifting confidence in a global economic recovery.
Commodity prices were also lifted by a weaker U.S. dollar,
as investors hesitated ahead of Friday's key non-farm payrolls
report, which could further confirm a stabilizing labor
market.
The Institute for Supply Management said its index of
national factory activity rose to 55.9 in December, its highest
level since April 2006, and above forecasts for a reading of
54.3. A reading above 50 indicates expansion. For details, see
[]
The ISM survey followed solid readings in the
commodity-hungry manufacturing sectors in China and India.
"We know that manufacturing is the main catalyst for this
rebound," Said Peter Boockvar, equity strategist, at Miller
Tabak & Co. "What's still unanswered is where is the end demand
and what is the sustainability of any rebound in
manufacturing."
The Dow Jones industrial average <> rose 160.06 points,
or 1.53 percent, at 10,588.11. The Standard & Poor's 500 Index
<.SPX> added 17.79 points, or 1.60 percent, at 1,132.89. The
Nasdaq Composite Index <> climbed 37.74 points, or 1.66
percent, at 2,306.89.
Energy and materials were the top sectors in the S&P 500.
Alcoa Inc <AA.N>, the aluminum producer, rose 3.7 percent to
$16.70, while oil and gas producer Apache Corp <APA.N> added
2.2 percent to $105.41.
"The focus right now is on (corporate) earnings, and any
number that shows us that the picture is better than expected,
which this number does, is going to bring to light a positive
earnings season in the next two to three weeks," said Marc
Pado, U.S. market strategist at Cantor Fitzgerald & Co in San
Francisco.
Both of China's PMI manufacturing surveys rose in December,
with the official reading hitting its highest level in 20
months. That was echoed in India, where the manufacturing index
hit a 7-month peak last month.
Oil-related companies got a boost after Deutsche Bank
upgraded the U.S. refining sector, raised the ratings on
several refiners, including Valero Energy Corp <VLO.N> and
Sunoco Inc <SUN.N>. []
Valero jumped 6.7 percent to $17.87, and Sunoco advanced
5.2 percent to $27.46. The PHLX Oil Service index <.OSX>
climbed 3.5 percent.
U.S. crude oil futures rose 2.6 percent to $81.39 after
hitting a 2-month high earlier in the session, while the U.S.
dollar fell 0.5 percent against a basket of currencies. Copper
hit a 16-month high.
Robert W. Baird upgraded chipmaker Intel Corp <INTC.O> to
"outperform" on expectations for a rebound in corporate PC
spending. That helped send the Philadelphia semiconductor index
<.SOXX> up by 1.8 percent.
Intel, a Dow component and a bellwether on Nasdaq, climbed
2.4 percent to $20.88. []
(Reporting by Edward Krudy; editing by Jeffrey Benkoe)
