Plenty of good news for US and UK, so can it last till the year end?

After seesawing through the session, stocks staged a rally to end higher Monday, with financial, technology andcommodity shares leading the charge. Stocks rallied in the morning after a key manufacturing index spiked to its highest levelin three and a-half years in October. An upbeat reading on pending home sales and Ford Motor's big profit report also added tothe morning bounce, giving investors a reason to jump back into stocks after last week's sell-off. But the morning rally turnedsour in the afternoon as weakness in financial, tech and transportation shares spearheaded a broader retreat. By the last hour,short-term investors used the selling as an opportunity to jump back in and scoop up a variety of shares. The Dow Jonesindustrial average gained 0.8% (+76.7 pts, close 9,789.4). The Nasdaq gained 0.2% (+4.1 pts, close 2,049.2) and the S&P 500gained 0.7% (+6.7 pts, close 1,042.9). U.S. light crude oil for December delivery gained US$1.13 to settle at US$78.13 a barrelon the New York Mercantile Exchange. (CNNmoney)

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Manufacturing in the U.S. expanded faster than anticipated in October, easing concern the economic recovery will be cutshort once government aid wanes. The Institute for Supply Management’s factory index rose to 55.7, a three-year high andexceeding every estimate of the 70 economists surveyed by Bloomberg News, data from the Tempe, Arizona-based group showed yesterday. Stocks rose as the data showed the world’s largest economy may be gaining momentum after growing lastquarter at the fastest pace in two years. More than US$2trn in global stimulus and a cheaper dollar may also lift salesoverseas, ensuring assembly lines keep humming into 2010 as factories rebuild depleted stockpiles. (Bloomberg)

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The number of contracts to buy previously owned homes in the U.S. rose in September for an eighth straight month asAmericans rushed to meet a deadline for a home-buyer tax credit. The index of signed purchase agreements, or pending homesales, rose 6.1% after a 6.4% gain in August, the National Association of Realtors said in Washington. Compared with a yearearlier, pending sales rose 19.8%, without adjusting for seasonal variations. Foreclosure-driven price declines and lowmortgage rates have also pushed sales up this year. Home sales may cool in coming months unless the credit is extendedunder a deal worked out by Senate Democrats. (Bloomberg)

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Spending on U.S. construction unexpectedly rose in September as residential builders rushed to finish projects inanticipation of a possible end to the first-time home-buyers tax credit. The 0.8% increase, the biggest since September 2008,followed a revised 0.1% drop in August that was previously reported as a 0.8% gain, Commerce Department figures yesterdayshowed. Spending on residential and government projects climbed, while outlays on private commercial construction slumpedfor a fifth consecutive month. Low borrowing costs, price declines and the government’s US$8,000 tax credit for first-timebuyers stabilized sales and spurred the biggest increase in residential construction in 26 years in the third quarter. Lawmakersare working on extending the credit, which may help support construction even as commercial real estate falters. (Bloomberg)

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President Barack Obama said the U.S. economy has pulled “back from the brink” and the government must now “getserious” about reducing debt and helping spur job growth. Addressing a panel of economists and business and labour leaders,the president said the government and private industry must take “bold, innovative action” to bring the unemployment ratedown and lay the foundation for future growth. This was the second time the full board has met to brief the president on ways tocreate jobs and encourage economic growth. Obama formed the advisory panel in February to provide an “independent voiceon economic issues.” Yesterday’s meeting focused on creating jobs through innovation. Obama said if “entrepreneurship” and“dynamism” are encouraged by the government “there’s no reason why we’re not going to be able to not only create jobs, butthe kind of sustainable economic growth that everybody is looking for.” (Bloomberg)

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Europe’s manufacturing industry expanded for the first time in 17 months in October, adding to evidence the region ispulling out of the worst recession in more than six decades. An index of manufacturing in the 16-nation euro area rose to 50.7from 49.3 in September, London-based Markit Economics said yesterday, confirming an Oct. 23 estimate for the gauge, whichis based on a survey of purchasing managers. The last time the index was above 50, indicating expansion, was in May 2008.Euro-area confidence in the economic outlook is at the highest since Lehman Brothers Holdings Inc. collapsed, and theInternational Monetary Fund last month forecast that the global economy will expand next year at a faster pace than previouslyprojected. (Bloomberg)

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U.K. manufacturing unexpectedly expanded in October at the fastest pace in two years, a sign factory production isrecovering from the economy’s longest contraction on record. A gauge based on a survey of companies rose to 53.7 from 49.9in September, the Chartered Institute of Purchasing and Supply and Markit Economics said yesterday in London. Economistspredicted 50, the median of 30 forecasts in a Bloomberg News survey showed. Readings above 50 indicate expansion.Yesterday’s figures will make the Bank of England’s task tougher as it gauges this week whether the economy needs furtherstimulus. While surveys of manufacturers and services companies have indicated the economy is recovering from the worstrecession since World War II, a report two weeks ago showed it unexpectedly contracted in the third quarter. (Bloomberg)

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U.K. house prices rose for a third month in October as increased demand for homes and a lack of properties for salepushed up values, Hometrack Ltd. said. The average cost of a home in England and Wales climbed 0.2% from September to156,400 pounds (US$258,000), the London-based property-research company said in an e-mailed statement yesterday. Houseprices fell 4.2% y-o-y. “The last six months has seen a continued improvement in housing market sentiment on the back ofrising demand and a lack of housing for sale,” said Richard Donnell, director of research at Hometrack. “Prices have firmed andthe discount between sales and asking prices is back to the same level it was at the start of the credit crunch over two yearsago.” Buyers are returning to the property market after home values dropped as much as a fifth from their 2007 peak andinterest rates fell to a record low. (Bloomberg)