A sign for Wall Street is seen just outside the New York Stock Exchange.(Photo: Timothy A. Clary, AFP/Getty Images)
NEW YORK (AP) - For now, bad news seems to be good for the stock market.
Investors judged that the latest weak economic reports will make it more likely that the Federal Reserve will continue to stimulate the economy and support a rally on Wall Street.
On Monday, the Institute for Supply Management said its index of U.S. manufacturing activity fell in May to its lowest level since June 2009 as overseas economies slumped and weak business spending reduced new orders to factories.
That helped convince investors that the Fed will hold off from slowing down its $85 billion bond-buying program.
The S&P 500 fell in the morning after the manufacturing report was published and wavered all day, before climbing decisively in the last hour of trading. It finished up about 9 and a half points at 1,640. The Dow gained 138 to 15,254 and the Nasdaq also added about 9 and a half to 3,465.