INSTANT VIEW: Leading indicators up for 5th straight month

NEW YORK (Reuters) - An index measuring the U.S. economy's prospects rose for a fifth straight month in August to a 1-1/2 year high as stock market prices surged amid views a recovery had started, data from a private research group showed on Monday.

KEY POINTS: * The Conference Board's index of leading economic indicators, which is supposed to forecast economic trends six to nine months ahead, rose 0.6 percent to 102.5, the highest level since January 2008, after a revised 0.9 percent gain in July. * Wall Street economists had forecast a rise of 0.7 percent after an initially reported 0.6 percent increase in July. * "These numbers are consistent with the view that after a severe downturn, a recovery is very near. But the intensity and pattern of that recovery is more uncertain," said Conference Board economist Ken Goldstein.

COMMENTS:

BRIAN BETHUNE, U.S. ECONOMIST, IHS GLOBAL INSIGHT, WALTHAM,

MASSACHUSETTS

"The money supply declined again, which is not good. But the other indicators are showing a pickup in the economy in the third quarter, which is not a big surprise.

"Our view is that it's not a sustainable (recovery) because that's a lot of special factors like 'cash for clunkers.' By and large, this indicator is reflecting for the most part current conditions in the quarter. By the end of the year we should see slower momentum."

STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO., GREENWICH,

CONNECTICUT:

"Again, it's a rise. It's maybe a tad weaker than expected. But for stock prices, it's not going to change the overall direction where stocks were a bit overbought here, looking for a modest pullback, but still should be supported in an orderly pullback. (This is) probably not material enough to sidetrack stocks that are in the midst of a bit of a pullback, but orderly and looking to still stay supported on modest pullback, and still likely to see some further gains. There's been tremendous momentum behind the rise here and usually prior to a pullback when you see such participation by individual stocks than what we are seeing, the pullback will be generally orderly."

PETER KENNY, MANAGING DIRECTOR AT KNIGHT EQUITY MARKETS IN

JERSEY CITY, NEW JERSEY

"This is not what the market was looking for. We were hoping for a strong sequential number, and this is a slippage. However, it's giving the market what it needs, a chance to take some profits and manage the risk. I also don't think that this will end up being a trend."

MARKET REACTION: STOCKS: U.S. stock indexes were little changed. BONDS: U.S. Treasury debt prices were unchanged. DOLLAR: U.S. dollar was unmoved.