Stock markets around the world started September with a surge, following news of expanding manufacturing in both China and the U.S.
The U.S. Institute for Supply Management's factory index rose to 56.3 in August, from 55.5 in July, surprising economists who had forecast a drop.
The increase is good news because it shows that the sector, which has been leading growth in the U.S., continues to have momentum, even as other key drivers of the economy, principally the housing industry, are struggling.
The upbeat U.S. economic news comes just after China reported that its manufacturing continues to expand, highlighting how Asia, along with some developing nations, are carrying the bulk of this recovery.
The S&P 500 index climbed 25.47, or 2.4 per cent, to 1074.8. . The Dow Jones industrial index rose 211.54 points, or 2.1 per cent, to 10226.26. In Toronto, the S&P/TSX composite index gained 89 points to 12002.9.
Toronto stocks are feeding off the positive news out of China, led by Western Coal which jumped almost 8 per cent in morning trading. HudBay Minerals rose almost 3 per cent.
Gold stocks were getting hit, partly on speculation that some traders will shift to riskier assets to try to capitalize on any market momentum. Barrick Gold dipped nearly 3 per cent.
Gold is trading at $1,251 (U.S.) an ounce, up 70 cents. Oil is at $73.09 a barrel after jumping $1.17. The loonie gained nearly a penny against the U.S. greenback to 94.7 cents.