Stocks climb as spending increases

NEW YORK (AP) - Stock indexes rose Monday as a flurry of new reports bolstered hopes that the economy is slowly recovering.

U.S. manufacturing activity grew for a sixth straight month in January to the strongest level since August 2004, according to the Institute for Supply Management. The trade group said factories increased production as customers replenished inventories.

The ISM's manufacturing index jumped to 58.4 in January from 54.9 in December. Analysts polled by Thomson Reuters had expected a level of 55.5. Any reading above 50 signals growth.

Meanwhile, the Commerce Department said consumer spending increased by 0.2 percent in December, its third straight monthly gain. The government also said personal income increased more than expected in December.

The positive signals in the economic reports lent support to a market that fell sharply in late January, marking its worst monthly performance since the bear market early last year. The Dow Jones industrials reached a 15-month high of 10,725.43 on Jan. 19 but is still down 6.1 percent since then.

In late morning trading, the Dow rose 84.11, or 0.8 percent, to 10,151.44. The broader Standard & Poor's 500 index rose 10.12, or 0.9 percent, to 1,083.99. The Nasdaq composite index rose 10.48, or 0.5 percent, to 2,157.83.

Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.65 percent from 3.60 percent late Friday.

The dollar mostly fell against other major currencies, while gold prices rose.

On Monday, President Barack Obama sent the U.S. Congress a $3.83 trillion budget that would pour more money into the fight against high unemployment and boost taxes on the wealthy. The nation's unemployment rate sits at 10 percent.

In afternoon trading, Britain's FTSE 100 rose 0.9 percent, Germany's DAX index rose 0.8 percent, and France's CAC-40 rose 0.5 percent. Earlier, Japan's Nikkei stock average rose 0.1 percent.

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Augstums reported from Charlotte, N.C.