Tea leaves and stock markets

Somewhat surprisingly, U.S. markets staged a rally of sorts on Sept. 1 with the Dow rising 219.14, (2.19%), Standard & Poor’s  up 27.08 points (2.58%), and the more technology-weighted Nasdaq up 53.24 points (2.52%).

Update: Former Labor Secretary Robert Reich is attributing much more of the bounce to China's improved Purchashing Managers Index, which had been in decline for three straight months, than anything else.

According to The New York Times, the rally seemed largely based on an unexpected rise in the Institute of Supply Management's manufacturing index, which went up to 56.3 in August from 55.5 in July. Many economists had apparently expected a drop to around the 53 mark. Positive economic reports from China and Australia also were credited with fueling today's market optimism.

What does it mean? Maybe nothing. The markets have been rather volatile for a while now, and the gains could all be given back tomorrow. But, the U.S. manufacturing sector expanded for the 13th consecutive month, which can't be a bad thing, and any upward movement in the ISM index in the face of negative employment and housing reports is welcome.

Stay tuned and keep your seatbelts fastened.