Manufacturing expands faster than expected in August

The Dow Jones, NASDAQ and S&P 500 were all up by more than 2 percent this morning on the news — production and employment showed the greatest gains in the index, while new orders continued to grow but at a slightly slower rate, according to the report. 

Another positive today was a revised manufacturing report for Europe, showing a faster-than-expected recovery for the 16 countries that use the euro. U.S. financial markets have pulled back amid the European debt crisis that cropped up in the spring. 

Eleven of the 18 manufacturing industries reported growth in August, led by metals, apparel and transportation equipment. 

The inventory index increased to 51.4 from 50.2 in July. A figure higher than 50 means manufacturers are increasing stockpiles.