INSTANT VIEW: ISM, UMichigan sentiment rise in January

NEW YORK (Reuters) - U.S. factory activity rose into expansion territory in January after contracting in December to the weakest since April 2003, according to an industry report released on Friday.

U.S. consumer sentiment rose less than expected in January from December, although worries persisted over sharp declines in the stock market and the housing slump, a survey released on Friday showed.

KEY POINTS: * The Institute for Supply Management said its index of national factory activity rose to 50.7 in January from 48.4 in December. * The ISM reading was above economists' median forecast for a reading of 47.3. A reading above 50 indicates expansion. * The Reuters/University of Michigan Surveys of Consumers said its final January figure on consumer sentiment was 78.4, above December's final reading of 75.5. * Reuters/University of Michigan was down from preliminary January estimates of 80.5 and slightly below the median forecast of 79.0 in a Reuters poll.

COMMENTS:

DENNIS SADLOWSKI, CHIEF EXECUTIVE OFFICER, SIEMENS ENERGY & AUTOMATION INC, ALPHARETTA, GEORGIA:

"It doesn't surprise us much at all (that ISM showed manufacturing growth). With the most recent headlines indicating a steep downturn and everyone using the 'r' word a little more loosely, we have been talking to our customers and -- not withstanding a significant shift -- they are still pretty optimistic. This month's numbers don't surprise us much.

"We see a slower growth outlook with our indicators, but it is still a growth outlook."

WILLIAM SULLIVAN, CHIEF ECONOMIST, JVB FINANCIAL GROUP, BOCA RATON, FLORIDA:

"The ISM report shows some sign of stability in the manufacturing sector as 2008 got under way.

"However, this bounce back in manufacturing activity that the ISM suggests still doesn't produce one new job in the economy.

"The recession risks are building and the jobs data are consistent with a recession beginning in January.

"The Treasury market is obviously reacting to what is taking place in the equity arena."

NORBERT ORE, CHAIR OF THE ISM MANUFACTURING BUSINESS SURVEY COMMITTEE, ATLANTA, GEORGIA:

"We've got a number of dynamics working and some of them seem to be working in favor of the manufacturing sector. The overall index came in at 50.7 indicating slight growth in manufacturing, as opposed to last month which I thought was an off-trend decline. The January reading appears to be much more on trend.

"If you look at the last 12 months, the ISM manufacturing index has averaged 51.2 with only a 5 point spread between a low of 48.4 and a high of 53.4. It's rare that we have such a tight band of growth and contraction within manufacturing. What that really says is that for the past 12 months, manufacturing has been going sideways; there has been growth, marginal growth, but manufacturing seems to be holding up quite well all things considered about what's going on in other parts of the economy."

CARL LANTZ, U.S. INTEREST RATE STRATEGIST, CREDIT SUISSE, NEW YORK: