It’s a glorious Tuesday on Wall Street with the Dow Jones Industrial Average hitting all-time highs with the blue chip index pushing on 14,300 for the first time in its history not even halfway through the trading day. Helping push equities is the latest reading of the Institute for Supply Management Non-Manufacturing Index that showed that the services industry in the U.S. had its best month in a year during February.
ISM said that is non-manufacturing index climbed to 56 percent in February from 55.2 percent in January, representing its 39th straight month of expansion and highest reading since last February when the index was at 56.1%. Readings over 50 indicate expansion in the sector, while readings below 50 signal contraction in the services sector, which employs about 85 percent of all American workers.
Economists were expecting a flat to modestly down month for February compared to January.
In the report, the Business Activity Index was 56.9% (up from 56.4% in January), the New Orders Index was 58.2% (up from 54.4% in January) and the Employment Index was 57.2% (down from 57.5% in January). Inventories posted the largest move with a jump from contraction of 47% in January to an expansion mark of 54.0 in February.
All tallied, 13 of the 18 service sectors showed growth in February.
“The majority of respondents” comments reflect a growing optimism about the trend of the economy and overall business conditions,” the ISM said in the report today. Respondents made comments such as, “Our business is beginning to turn up slightly,” “Construction market showing some positive signs” and “February bouncing back to forecast levels, which was 11 percent over 2012.”
The latest info from the ISM, coupled with its Manufacturing Index released on Friday, shows that the U.S. economy is trudging through any concerns about the fiscal cliff, increased taxes, macroeconomic worries and the sequester fiasco in Washington. Last week, the ISM said that its manufacturing index outpaced economist predictions with a 54.2% reading for February, marking its highest level in nearly two years.
In Tuesday action, the Dow rose as high as 14,286.37, eclipsing its record high of 14.164.53 set on October 9, 2007 right before the markets collapsed. The Standard & Poor’s 500 stock index has traded as high as 1,542.53, just inches from its all-time high of 1,565.15 set the same day as the Dow’s previous record. The Nasdaq has galloped ahead also, printing as high as 3,226.88, representing its highest mark since November 2000.