Wall Street Kicks Off May in Rally Mode

FOX Business: The Power to Prosper

The markets rallied on Tuesday amid data showing the expansion in U.S. manufacturing picked up steam in April.

Today's Markets

As of 3:00 p.m. ET, the Dow Jones Industrial Average climbed 105 points, or 0.79%, to 13317, the S&P 500 gained 13 points, or 0.93%, to 1411 and the Nasdaq Composite rose 21.5 points, or 0.71%, to 3068.

April was a weak month for Wall Street; indeed, the broad S&P 500 ended with a 0.75% loss, snapping a four-month winning streak. However, May was starting off with a bang.

Energy, financial and technology shares were the biggest gainers on the day. Indeed, the four best performers on the Dow were JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), Intel (NASDAQ:INTC) and Hewlett-Packard (NYSE:HPQ).

Volatility dropped some 5.1% as tracked by the CBOE's VIX and the yield on the 10-year U.S. Treasury bond rose 0.033-percentage point as traders fled the safe-haven asset.

Traders Cheer Strong ISM Data

The Institute for Supply Management's PMI gauge climbed to 54.8 in April from 53.4 in March, suggesting the pace of expansion in the U.S. manufacturing sector picked up in April. Economists were expecting a slowdown to 53.

Several regional reports, including a closely-followed one on the Midwest region released on Monday, have come as a disappointment for Wall Street.

"Overall, we find it difficult to detect anything sour in this report, which is a nice interruption to the weaker data releases of late," analysts at Nomura wrote in a note to clients.

Not all data beat expectations, however. A separate report from the Commerce Department showed construction spending climbed 0.1% in March, a slower pace than the 0.5% economists had expected.

The major automakers also report monthly sales data on the day. Chrysler posted U.S. sales of 141,165 units in April, a 20% increase from the same month in 2011. Ford (NYSE:F), meanwhile, saw a 5% drop to 180,350. General Motors (NYSE:GM) saw an 8.2% drop to 213,387 units.

On the corporate front, Pfizer (NYSE:PFE) unveiled an adjusted first-quarter profit of 58 cents a share, beating estimates by two cents. The health-care giant’s revenue came in at $15.4 billion, slightly short of the $15.47 billion analysts expected. The Dow component also said it sees its full-year adjusted earnings hitting between $2.14 and $2.24 a share. Analysts were looking for $2.26 for 2012.

Centerbridge Partners also revealed it is taking P.F. Chang’s (NASDAQ:PFCB) private in $1.1 billion deal. The companies said shareholders will receive $51.50 a share, a roughly 30% premium.

Commodities were mixed. Crude oil traded in New York jumped $1.13, or 1.1%, to $106.00 a barrel. Wholesale New York Harbor gasoline dipped 0.61% to $3.11 a gallon.

In metals, gold rose 60 cents, or 0.04%, to $1,665 a troy ounce.

Foreign Markets

Most exchanges in Europe were closed for the Labour Day holiday, although the London Stock Exchange was open. The FTSE 100 rose 0.58% to 5760.

In Asia, the Japanese Nikkei 225 sold off by 1.8% to 9351.