Oct 1 - Summary of business headlines: The Dow rallies on data showing uptick in U.S. manufacturing activity, Value investor Whitney Tilson not seeing much value at current prices; 3M, Honeywell go deal hunting. Conway G. Gittens reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Blue chips begin the final quarter of the year in rally mode as U.S. factories return to growth. The Dow finished with a 77-point gain, but the rest of the market was little changed. The U.S. manufacturing sector expanded for the first time in four months in September. Orders rose according to the Institute for Supply Management, something also not seen since May, and employment strengthened last month. But economic jitters abound. Manufacturing activity in the euro zone suffered its deepest contraction since 2009 and growth is slowing in China. Back in the U.S, construction spending in August tumbled by the most in a year. Noted value investor Whitney Tilson says he sees more reason to go short, a bet stocks will go down. SOUNDBITE: WHITNEY TILSON, FOUNDER, T2 PARTNERS (ENGLISH) SAYING: "I can tell you right now, I am finding five to ten interesting short ideas to go research for every one good long idea I'm seeing. And so that is telling me something. I don't think the market is ripe for a crash or anything like that but the market is up 16-17 percent this year, and the economy is sort of just plodding along at one or two percent. So, things, it's really hard to find bargains out there." But some corporations are seeing bargains. 3M is buying Ceradyne, the industrial ceramics company, for $860 million. And Honeywell is paying $525 million in cash for a 70-percent stake in Thomas Russell, a privately held maker of equipment used in natural gas production. In European action - markets saw a bounce on relief - results from the Spanish bank stress tests released after Friday's close held few surprises. Conway Gittens, Reuters