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Close Update: Contracting ISM Barely Dents Wall Street Rally

Wall Street shrugged off a signs of contraction in the manufacturing index and posted significant gains as a rally healthcare and financial stocks drove the S&P 500 through 2,100 and the Dow Jones Industrial Average to a one-week high. Action was also fueled by an above-consensus gain in construction spending and upbeat November vehicle sales that resulted in the three benchmark indices closing at least 1% higher.

The Institute for Supply Management manufacturing index slipped below the 50-level expansion/contractionary threshold to 48.6 from October's 50.1, missing expectations for a small improvement to 50.5. As a result, stocks surrendered nearly all of their opening gains, coinciding with the S&P 500 challenging 2,100 resistance. Selling pressure was mitigated, however, by a 1.0% gain in construction spending and November car sales, giving the Dow a foothold at 17,800 and the Nasdaq at 5,120.

The economic calendar heats up on Wednesday with the release of the monthly ADP payroll report (expected +183,000 new private payrolls), Q3 non-farm productivity (expected +2.2%) and unit labor costs (expected +0.9%), as well as the latest Fed Beige Book at 2:00pm ET.

Fed Chair Janet Yellen makes two appearances Wednesday with the welcoming address at the Fed College Challenge at 8:30 AM ET and again in the afternoon with a speech to the Economic Club of Washington. Governor Daniel Tarullo will be speaking at an FDIC conference, while San Francisco Fed President John Williams is giving a speech in Portland Oregon just before the close.

Here's where the markets stand at the close:

US MARKETS

Dow Jones Industrial Index was up 168.43 points (+0.95%)

S&P 500 was up 22.22 points (+1.07%)

Nasdaq Composite Index was up 47.64 points (+0.93%)

GLOBAL SENTIMENT

FTSE 100 was up 0.62%

Nikkei 225 was up 1.34%

Hang Seng Index was up 1.75%

Shanghai China Composite Index was up 0.32%

UPSIDE MOVERS

(+) GIGA (+132.43%) Announced a software licensing agreement with Lockheed Martin ( LMT )

(+) TERP (+32.61%) Pulling out of a deal to acquire shares of Renovia Energia

(+) BLOX (+22.01%) Beat Q3 expectations and issued a strong outlook

(+) XOMA (+9.77%) Novo Nordisk ( NVO ) buys rights to Xoma's diabetes treatment for $295 million

(+) GLBL (+9.43%) Pulls out of Brazilian power deal

DOWNSIDE MOVERS

(-) BBEP (-20.50%) Suspending distribution payments

(-) REXX (-17.52%) Stifel Nicolaus downgraded to sell from hold

(-) JOY (-13.16%) Bank of America downgraded to underperform from neutral

(-) STRP (-9.67%) NJ lawsuit filed alleging securities law violations

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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