NEW YORK (Reuters) - The service sector expanded in February, and underlying employment and price indexes suggest steady improvement in the economy, a private sector survey showed on Thursday.
KEY POINTS: * The Institute for Supply Management said its report on U.S. non-manufacturing rose to 59.7 in February. The consensus estimate was for 59.5.
RUDY NARVAS, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK:
“It was slightly better than the street was expecting. The big story was the employment index which was bumped up from 55.6 from 54.5. It is the highest reading since September 2006. This suggests upside risk to the payrolls number on Friday. You are looking at the risk of a print above 200,000.”
“The S&P didn’t seem to know what to do with it. We found resistance around 1,325 and the number wasn’t good enough to get us out of that, so there could be some profit taking later. It was good, but the market needed greater upside surprise to break us out of that level.”
THEODORE LITTLETON, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS:
“The headline continues to show fairly solid growth outside the manufacturing sector, after fairly anemic growth during most of the early recovery period.”
MARKET REACTION: STOCKS: U.S. stock indexes added modestly to gains BONDS: U.S. bond prices were little changed FOREX: The dollar was steady at lower levels against the euro