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S&P and Dow close with records, again

American flags hang behind a Wall Street sign

American flags hang behind a Wall Street sign outside the New York Stock Exchange, in Manhattan on Aug. 9, 2011. Credit: AP / Mark Lennihan

Stocks closed mostly higher on a quiet Monday following two reports that showed the manufacturing industries of the world's two largest economies expanded last month.

Both the Dow Jones industrial average and the Standard & Poor's 500 index were able to set record highs for a second trading day in a row. The Dow rose 26.5 points, or 0.2 percent, to close at 16,743.63. The S&P 500 rose 1.4 points, or 0.1 percent, to close at 1,924.97 and the Nasdaq composite fell 5.42 points, or 0.1 percent, to 4,237.2.

U.S. MANUFACTURING. The Institute for Supply Management said U.S. manufacturing grew at a brisk pace last month, correcting its earlier statement that growth had slowed. The ISM said the correct number for its manufacturing index was 55.4 in May, in line with what economists were expecting. That's a better result than the 53.2 figure that ISM initially reported.

The ISM manufacturing report is one of two closely watched reports each month, second only to the government's monthly survey of the job market. To see major revisions to such a report the day it's released was highly unusual, traders said, especially for a report that is so relied on each month.

"It's a debacle, as far as ISM is concerned," said Tom di Galoma, head of fixed income rates at ED&F Man Capital. "It's hurt their credibility and it's going to take a while for that to recover."

CHINA MANUFACTURING. Investors also got some positive manufacturing news out of Asia. A Chinese manufacturing index edged up to 50.8 in May from 50.4 in April. Asian stocks rose on the report.

Trading is expected to be quiet until later this week. Investors will get the May jobs report Friday, and the European Central Bank will announce its latest interest rate policy decision Thursday.

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