Wall Street Gains as Weak Data Spurs Stimulus Hopes

Wall Street was higher on Tuesday morning, led by financial stocks, as weak manufacturing data globally raised hopes of a further easing of monetary policies.

Manufacturing activity across much of Asia shrank in February, with China falling for a seventh straight month. In Europe, factory growth waned, dealing a further blow to policymakers who are struggling to stimulate their economies and spur inflation.

The downbeat data may sharpen the focus of officials from the world's leading economies who said at the recent G20 meeting they needed to look beyond ultra-low rates and printing money to reanimate growth.

Data from the Institute for Supply Management later in the day was expected to show US manufacturing activity steadied in February, with the national manufacturing index inching up to 48.5 from 48.2 in January.

The data will factor into the Federal Reserve's decision on further interest rate hikes this year.

While Fed Chair Janet Yellen has hinted at continuing with the central bank's plan to raise rates gradually through the year, other policymakers are calling for a pause amid the turmoil in global financial markets and slowing global growth.

"We're seeing this little rally from the last three weeks continue for now," said Adam Sarhan, chief executive of Sarhan Capital in New York.

"You've got a notion the market has shifted back to the easy money trade. In the short term, that helps lift asset prices, but long term, that's not good," he cautioned.

At 1439 GMT (8:09 p.m. in India), the Dow Jones industrial average was up 79.71 points, or 0.48 per cent, at 16,596.21.

The S&P 500 was up 11.41 points, or 0.59 per cent, at 1,943.64 and the Nasdaq Composite was up 31.71 points, or 0.7 per cent, at 4,589.66.

Nine of the 10 major S&P sectors were higher, led by a 0.88 per cent rise in the financials sector, which has been the worst performer this year.

Shares of Fiat rose 3.4 per cent and those of Ford increased 4.2 per cent after the automakers said US sales rose in February.

GM was up 2.5 per cent. Analysts expect overall US auto sales rose 7-9 per cent last month.

Honeywell rose 3.3 per cent to $104.67 after the company dropped its bid for United Technologies. United Tech was down 4 per cent at $92.87.

Advancing issues outnumbered decliners on the NYSE by 2,304 to 401. On the Nasdaq, 1,667 issues rose and 482 fell.

The S&P 500 index showed three new 52-week highs and one new low, while the Nasdaq recorded 26 new highs and 29 new lows.