NEW YORK -- Encouraging economic reports lifted stocks Monday and bolstered hopes that the recovery is in better shape than many had thought.
The Dow Jones industrial average rose 118 points after falling in the final two days of last week. Energy stocks led the market higher after a strong earnings report from Exxon Mobil.
Gains in manufacturing and personal incomes helped shore up the market's confidence after three straight losing weeks that left stocks with a loss for January. Investors were already becoming more optimistic thanks to news Friday that in the final three months of 2009, the economy grew at the fastest pace in six years.
The strongest piece of economic news came from the Institute for Supply Management, which said its index of U.S. manufacturing activity grew for a sixth straight month in January to the strong est level since August 2004. The trade group said factories increased production as customers replenished inventories.
Surveys released Monday in Europe and China signaled that factories overseas are also going strong, which also helped send shares of industrial companies higher.
Meanwhile the Commerce Department said consumer spending increased by 0.2 percent in December, its third straight monthly gain. The government also said personal income increased more than expected in December.
"The economy and the recovery seem to be on track," said Kevin Shacknofsky, portfolio manager of the Alpine Dynamic Dividend Fund in Purchase, N.Y.
The positive signals lent support to the market. The Dow rose 118.20, or 1.2 percent, to 10,185.53. The broader Standard & Poor's 500 rose 15.32, or 1.4 percent, to 1,089.19. The Nasdaq rose 23.85, or 1.1 percent, to 2,171.20.
Crude oil rose $1.54 to $74.43 per barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies rose 7.21, or 1.2 percent, to 609.25.
Britain's FTSE 100 rose 1.1 percent; Germany's DAX index rose 0.8 percent, and France's CAC-40 rose 0.6 percent. Earlier, Japan's Nikkei stock average rose 0.1 percent.
