Stocks begin September higher after data shows manufacturing industry grew in August

Stocks up on data showing growth in manufacturing

NEW YORK — News that the manufacturing industry has grown for the first time in 18 months is giving the stock market a modest advance.

The Institute for Supply Management said Tuesday its index of manufacturing activity rose to 52.9 in August, up from 48.9 in July and well above the reading of 50.5 analysts had been expecting.

A reading above 50 signifies growth in the industry — something that hasn’t happened since January 2008.

Investors also got more evidence that the housing industry is rebounding. The National Association of Realtors said its index of pending U.S. home sales rose 3.2 percent in July to 97.6, more than the 96.5 forecast by analysts. It was the reading’s highest level in more than two years, helped by a surge of first-time buyers taking advantage of a tax credit that expires this fall.

It was the sixth straight increase and 12 percent above the same month in 2008.

The upbeat news was somewhat offset by a Commerce Department report that construction spending edged down slightly in July due to weakness in nonresidential building and government projects. But home building had its best performance in 10 months.

Following the reports, the Dow Jones industrials rose 22.75, or 0.2 percent, to 9,519.03. The Standard & Poor’s 500 index rose 3.38, or 0.3 percent, to 1,024.00, while the Nasdaq composite index rose 17.33, or 0.9 percent, at 2,026.39.