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Shares Rise on Hope for Better Jobless Data

Stocks were mostly higher on Monday as growth in manufacturing provided more evidence that the economy might be picking up, or at least not getting any worse.

The gains came after news that manufacturing grew in September for the first time in four months.

The Institute for Supply Management, a trade group of purchasing managers, also said its gauge of manufacturing employment rose after a decline in August. It was a sign that the government’s monthly employment report, due on Friday, could be better than analysts have been expecting.

Also Monday, the government said builders spent more on home construction in August, the latest positive sign for the housing market.

Investors are looking for signs that there will be more workers with money to spend, said Jerry Webman, chief economist for OppenheimerFunds. That can create a “virtuous cycle” that generates its own fuel for a recovery.

“If you’re going to manufacture more you’re going to employ more people, and if you employ more people you’re going to pay them money, and they’re going to buy some stuff,” helping the economy, Mr. Webman said.

It was still a choppy day on Wall Street. The manufacturing report came out a half-hour after trading began and sent stocks sharply higher. The Dow Jones industrial average rose as much as 161 points and the Standard & Poor’s 500-stock index rose as much as 1.1 percent.

But market indexes gave up most of their gains in the afternoon. The decline started after the Federal Reserve chairman, Ben S. Bernanke, said the Fed needed to keep interest rates low because the economy wasn’t growing fast enough to reduce high unemployment. Mr. Bernanke made the remarks in a speech to the Economic Club of Indiana.

The S.& P. closed 0.27 percent higher, rising 3.82 points, to 1,444.49. The Dow rose 0.58 percent, or 77.98 points, to close at 13,515.11. The Nasdaq composite index fell 2.70 points, or 0.09 percent, to 3,113.53.

Goldman Sachs jumped $3.18, or 2.8 percent, to $116.86, after Barron’s wrote that investors were too pessimistic on the investment bank’s prospects.

Other financial stocks rose, as well. Bank of America rose 13 cents, or 1.5 percent, to $8.96, and JPMorgan Chase rose 49 cents, or 1.2 percent, to $40.97.

Quincy Krosby, a market strategist at Prudential Financial, said investors believed that the news about the economy had stopped getting worse. Besides the manufacturing news on Monday, she noted that recent data from China suggested that manufacturing had improved there as well.

“The numbers were still weak, but they were not as bad as before,” Ms. Krosby said. “So that was a positive backdrop for the market.”

Wendy’s fell 28 cents, or 6.1 percent, to $4.25 after a Janney Capital Markets analyst lowered his rating on the stock. He said he was seeing signs that the hamburger chain’s revenue would not be as strong as expected.

Markets around Europe rose. Results last Friday of an audit of 14 Spanish banks showed the lenders need $77.6 billion in capital. That was about what was expected, and well within the amount Madrid can get from fellow European countries.

A slight improvement in a survey of manufacturing in the 17 countries that use the euro also helped.

The DAX stock index in Germany rose 1.5 percent, the CAC 40 in France was up 2.4 percent, and the FTSE 100 in Britain rose 1.4 percent. The Ibex in Spain was up 1 percent.

Interest rates were little changed. The 10-year note jumped 4/32, to 100 2/32, and the yield slipped to 1.62 percent from 1.63 percent late Friday.

A version of this article appears in print on  , Section B, Page 8 of the New York edition with the headline: Shares Rise on Hope For Better Jobless Data. Order Reprints | Today’s Paper | Subscribe

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