Stock prices surge on upbeat manufacturing news

The stock market jumped on the first trading day of the year following reports of stronger manufacturing activity around the world as well as a rise in oil prices. A U.S. trade group said manufacturing activity expanded faster than expected in December. The Institute for Supply Management's index of manufacturing activity rose to 55.9 from 53.6 in November, more than analysts had expected. Overseas markets were already higher on news that China's manufacturing industry expanded last month at the fastest rate in 20 months. There were also positive signs on manufacturing activity in Europe. A monthly purchasing managers' index for the 16 countries that use the euro rose to a 21-month high, and a similar survey for Britain rose to a 25-month high. Meanwhile a weakening dollar boosted commodities prices, lifting materials stocks. An analyst's upgrade of semiconductor maker Intel Corp. sent technology shares higher. In late morning trading, the Dow Jones industrial average rose 132.10, or 1.3 percent, to 10,560.15. The Standard & Poor's 500 index rose 13.54, or 1.2 percent, to 1,128.64, while the Nasdaq composite index rose 32.03, or 1.4 percent, to 2,301.18. In economic news, Federal Reserve Chairman Ben Bernanke said Sunday that he wouldn't rule out higher interest rates to stop new speculative investment bubbles from forming. However, he did say stronger regulation is the best way to avoid such bubbles that helped push the economy into recession. Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.81 percent from 3.84 percent late Thursday. Markets were closed Friday. The technology industry was getting a boost after Robert W. Baird & Co. upgraded chipmaker Intel Corp. to "Outperform" and increased its price target on the stock to $26. The dollar fell against other major currencies, while gold prices rose. Overseas, Japan's Nikkei stock average rose 1 percent. In afternoon trading, Britain's FTSE 100 gained 0.7 percent, Germany's DAX index rose 0.6 percent, and France's CAC-40 gained 1.1 percent.