Stocks surge on manufacturing, housing data

Stocks are surging after better-than-expected reports on manufacturing and housing.

The Institute for Supply Management says its manufacturing index came in at 55.7 in October, much better than the reading of 53 economists had expected. A reading above 50 indicates growth. It was the third straight month of growth, and the strongest reading since April 2006.

Meanwhile, the National Association of Realtors says pending home sales rose 6.1 percent in September, the eighth straight month of gains. The rise was more than analysts had been expecting.

The Dow Jones industrials are up 114 at 9,827. The Standard & Poor's 500 index is up 11 at 1,047, and the Nasdaq composite index is up 11 at 2,056.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

NEW YORK (AP) _ Stocks are mostly higher early Monday as investors await key reports on manufacturing and housing, looking for reassurance that the economic recovery will be sustainable.

A surprise profit from Ford Motor Co. helped support the early gains. Ford said deep cost cuts and the government's Cash for Clunkers rebates helped it earn nearly $1 billion in the third quarter. Its shares soared nearly 10 percent in early trading.

Investors are hoping a report on U.S. manufacturing activity shows continued improvement in the industry. The market will also get reports on pending home sales and construction spending Monday morning.

The market appeared to take in stride news that commercial lender CIT Group Inc. filed for bankruptcy protection on Sunday after a debt-exchange offer to bondholders failed. The filing, one of the biggest in U.S. corporate history, did not come as a surprise, as the lender has been struggling for months to restructure its debt.

Stocks are coming off a volatile week, having posted their biggest losses in four months on Friday after rising sharply a day earlier on stronger-than-expected economic growth in the third quarter. Friday's losses helped send the Standard & Poor's 500 index into the red for the month of October, breaking a seven-month streak of gains.

The 3.5 percent growth in the U.S. economy in the third quarter was largely driven by government stimulus efforts. Investors are worried that once those measures run out, high unemployment and weak consumer spending will put a strain on the economy.

As the market heads into the final months of the year, investors are trying to determine whether the bets they've been placing on an economic rebound over the past several months have been warranted. Even with the S&P 500's 2 percent loss in October, the index is still up 53.2 percent from a 12-year low in March.

In morning trading, the Dow Jones industrial average was up 15.34, or 0.2 percent, at 9,728.07. The Standard & Poor's 500 index was up 1.86, or 0.2 percent, at 1,038.05, and the Nasdaq composite index was down 8.57, or 0.5 percent, to 1,658.56.