Stocks Lose Their Spark

Stocks on Wall Street rose Monday at the start of a new quarter after data showed strength in the American manufacturing sector, but a broad rally lost some fizzle late in the day.

The Standard & Poor’s 500-stock index was up 0.3 percent by the close, and the Dow Jones industrial average was ahead 0.6 percent. But declines in technology stocks helped pull the Nasdaq composite index down 0.1 percent.

The indexes trimmed their gains somewhat after Ben S. Bernanke, chairman of the Federal Reserve, in a speech in Indianapolis, delivered a broad defense of the Fed’s bond-buying stimulus plan, saying it was necessary to support a flagging economic recovery.

Mr. Bernanke pushed back against accusations that the Fed’s policy is laying the groundwork for inflation, enabling the government to run large budget deficits, undercutting the dollar and hurting savers.

Earlier, the Institute for Supply Management said its index of national factory activity rose to 51.5 from 49.6 in August, topping expectations for 49.7, according to a Reuters poll.

It was the first time since May that the index has been above the 50 threshold that indicates expansion in the sector.

The Markit Manufacturing index, however, fell to 51.1 points in September from 51.5 in August, and averaged 51.4 in the third quarter. Both the monthly and quarterly readings were the lowest in three years. Still, a reading above 50 indicates expansion.

Euro zone manufacturing put in its worst performance in the three months to September while Asia’s manufacturers are continuing to struggle in the face of tepid demand from the United States and Europe, flagging a return to recession for the euro zone and a seventh straight quarter of slowing growth in China, business surveys showed.

But European markets gained, with stock indexes up more than 1 percent. The DAX in Frankfurt finished 1.5 percent and the CAC 40 in Paris added 2.4 percent. The FTSE 100 in London rose 1.4 percent.

Equity markets were being supported by expectations of support from central banks, including the Federal Reserve and the European Central Bank, which are offsetting weak data, according to Rick Meckler, president of investment firm LibertyView Capital Management in New York.

“The market focuses more on future results than on what’s happening today,” he said.

Wall Street finished lower on Friday but recorded its best third quarter since 2010 after a series of central bank actions sparked a bullish reversal in equity markets, but signs of weakness in the economy drove stocks lower for the week.