Good manufacturing news props up Wall St

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Stocks on Wall Street gained as manufacturing data from the US, China and India beat expectations, providing optimism about the pace of global economic growth.

In mid afternoon trading, the Dow Jones industrial average rose 0.54 per cent, the Standard & Poor's 500 Index climbed 0.48 per cent and the Nasdaq Composite Index advanced 0.25 per cent.

The benchmark S&P 500 gained 12.5 per cent in September and October as an increasing number of reports bolstered the economic outlook.

Investors welcomed data showing that manufacturing in the US grew at the fastest pace in five months in October. Even so, consumer spending increased less than forecast in September and incomes dropped for the first time in more than a year, according to Commerce Department data.

In China, a purchasing managers' index released by the country's logistics federation rose to 54.7 last month from 53.8, beating expectations. A second China PMI, from HSBC and Markit Economics, climbed to 54.8 from 52.9.

India's manufacturing data also provided reason for optimism.

The HSBC Markit PMI for India, Asia's third-largest economy, rose to 57.2 in October from 55.1 in September.

"The data today reinforces that we have a sustainable expansion, albeit it's below average," Henry Smith, chief investment officer at Haverford Trust Co. in Philadelphia, told Reuters.

A key Fed meeting starts tomorrow, with investors expecting policy makers to announce an initial commitment to buy at least US$500 billion in Treasury debt over five months to spur lending and support economic recovery.

In Europe, the Stoxx 600 gained 0.2 per cent to 266.4 at the 4.30pm close of trading in London.

The Dollar Index, which measures its value against a basket of currencies, rose 0.25 per cent to 77.23.

The euro fell as low as US$1.3864 as the greenback gained on the US manufacturing data.

"Strength in the dollar definitely has a dampening effect on the move higher," Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey, told Reuters.

Oil prices climbed on comments by Saudi Arabia about consumers tolerating oil prices as high as US$90 a barrel. Concern about bombs found in Greece had fuelled earlier gains.

"Consumers are looking for oil prices around US$70, but hopefully less than US$90," Saudi Arabia's oil minister Ali al-Naimi said after a speech in Singapore. "There's almost an anchor now for the price."

His comments were seen by brokers and analysts as signalling that Saudi Arabia could allow prices to rise as high as US$90, above the US$70-US$80 range it has recently targeted.

US crude for December delivery rose US$2.16 to US$83.59 at 1749 GMT.

ICE December Brent crude rose US$2.06 to US$85.21.

Spot gold was bid at US$1,352.70 an ounce at 1516 GMT, against

US$1,357.05 late in New York on Friday. US gold futures for December delivery fell US$4.50 an ounce to US$1,353.10.