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World stock markets rallied Wednesday amid signs thatthe American recovery could be gaining traction - ledpartly by factory output - and relief that Europe might beon the verge of finding some much-needed leadership onits widening financial crisis.

There is a subtle mood shift, said Bob Atwell, chiefexecutive at Nicolet National Bank in Green Bay. Even as

mortgage and banking businesses remain a drag on theU.S. economy, I sense a shift in psychology thats moretilted to optimism than pessimism.

The Institute for Supply Management, a national industryassociation, said its widely followed manufacturingactivity index posted its 16th straight month of expansionin November.

Another indicator that curled upward Wednesday wasthe monthly employment survey from ADP EmployerServices, which showed that U.S. employers added more

jobs than in any other month since November 2007.

Data from ADP, which provides payroll and tax servicesto other companies, sparked a speculative frenzy aheadof Fridays official monthly employment report from theU.S. Labor Department, as some traders bet the nationfinally will show a large monthly job gain.

The Dow Jones industrial average posted its biggest gainsince Sept. 1, rising 249.76 points, or 2.3%, to 11,255.78.The Standard & Poors 500 index rose 25.52, or 2.2%, to1206.07. The Nasdaq composite rose 51.20, or 2.1%, to2549.43.

As recently as summer, economists speculated about the

likelihood of a double-dip recession. A full 12 monthsinto the recovery, American unemployment remainshigh by any measure. And in many ways, the economycontinues to send mixed signals.

Changing times

But sentiment appears to be shifting, economists said,not least after the government last week revised itsestimate of the pace of economic growth to 2.5% in thethird quarter from a preliminary 2.0%.

In a busy day of economic releases Wednesday, the

Federal Reserve Bank reported that 10 of its 12 regionsaround the nation are growing. Only those withheadquarters in Philadelphia and St. Louis reported thatconditions are mixed.

The Institute for Supply Managements manufacturingindex should carry special weight in Wisconsin, whichemploys a greater share of its workforce in manufacturingthan any other state. The factory activity index came in at56.6 for November, little changed from 56.9 in October.

Any reading above 50 indicates growth. At the depths ofthe recession, it was closer to 30; as recently as April, itshot to 60.4.

Awaiting news on jobs

Wall Streets rally set the stage for Friday morningsrelease of the Labor Departments jobs report forNovember.

Job-creation gains have been glacial at best duringmost months so far this year. In October, the ranks ofunemployed Americans who gave up even trying to lookfor a job hit a record of more than 1.2 million, even as thenation managed to add 151,000 net new jobs.

Economists on average expect the nations employersto at least match Octobers gains, said Rogier Kamerling,chief economist in Milwaukee at M&I Capital Markets.

Economy takes on a rosier glow | Milwaukee Journal Sentinel December 1, 2010

Economy takes on a rosier glowManufacturing expansion leads to optimism about job growth

John Schmid Text

Milwaukee Journal Sentinel December 1, 2010

8/8/2019 NB-AR-1210 Economy Takes on a Rosier Glow

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But some of the most crucial events for stock investorstook place in Europe.

The instability that rocked Greece earlier this year wasfollowed by the second European financial bailout in lessthan a year in Ireland. One reason that markets fell in thethree previous trading days were fresh concerns that thefiscal contagion from Greece and Ireland could spreadto Spain, Portugal and Italy, which all share the samecurrency under Europes 11-year-old euro project.

Ireland you can deal with, but Spain and Italy are big,Kamerling said.

Some of the run-up on Wednesday was fueled byhopes that the European Central Bank, which managesthe single currency, will use its monthly meeting onThursday to signal new activism to support the euro bloceconomy, Kamerling and others said.

Some now expect the Frankfurt-based EuropeanCentral Bank to show a willingness to buy bonds issuedby euro zone countries, a move that pumps liquidityinto the European financial system. The Euro Stoxx 50,

which tracks blue chip companies in Europe, rose 2%Wednesday.

In Asia, meanwhile, stocks rose on signals that theChinese economy is growing. A Chinese state indexof manufacturing activity indicated that the countryseconomy expanded for the 21st straight month.

Rockwell sees strength

Gains in the manufacturing sector in the United Statesand China have not been lost on Rockwell AutomationInc., which many view as a bellwether of the globalmanufacturing economy because it outfits factories withsystems to enhance their productivity.

The Milwaukee-based company has been tellinginvestors for weeks that it sees strength in the industrialsectors. Asked Wednesday for comment, Rockwellrepeated its statement that manufacturers are beginningto make large capital investments in their plants.

We are generally optimistic that recovery will continuein fiscal 2011, chief executive Keith Nosbusch said last

month.

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Economy takes on a rosier glow | Milwaukee Journal Sentinel December 1, 2010