The gloom was so pervasive this morning that a meh figure of 51.6 on ISM Manufacturing was enough to lift the S&P futures nearly 10 points instantly.  Amazingly it happened just as we saw a test of that 1120 level, which has been a rock for months.  Nothing to write home about, but in the context of a doom and gloom world traders are content.

I tweeted about an hour ago

@fundmyfund $$ ISM manufacturing at 10 AM has a low bar at 50.5, so any upside surprise could reverse margin (market) short term from its perverse gloom.

S&P up 15 points now as I type, from the lows.... we'll know in a few hours how much of this is simply short covering. 

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Full report here.  New orders were flat (bad), employment ticked up 2 (good), and prices were up 0.5 (don't know if the market wants higher prices or not at this time).

WHAT RESPONDENTS ARE SAYING ...
  • The economy continues to be a drag on our business outlook. We are trying to deal with new and additional FDA regulations which are costing significant dollars. It is hard to recoup any of these additional costs in our pricing levels without losing significant sales volumes. (Chemical Products)
  • Market is cautious, but still steady. (Electrical Equipment, Appliances & Components)
  • Global demand for semiconductors is down and maybe not yet 'bottomed out.' Inventory reduction activities are a priority. (Computer & Electronic Products)
  • Still strong automotive demand. (Fabricated Metal Products)
  • Orders remain consistent and steady — no sign of lower demand. (Paper Products)
  • Japan supply chain issues are over, but exchange rates and raw material prices are hurting our profit. (Transportation Equipment)
  • We sense a weakening in demand, but it is not extreme at this point. (Plastics & Rubber Products)
  • Overall, business is improving with a measurable uptick in orders this month. Part of that is due to pre-holiday season orders. (Miscellaneous Manufacturing)
  • Business continues to be sluggish. (Furniture & Related Products)
MANUFACTURING AT A GLANCE

SEPTEMBER 2011

Index

Series

Index

Sep

Series

Index

Aug

Percentage

Point

Change

Direction

Rate

of

Change

Trend*

(Months)

PMI51.650.6+1.0GrowingFaster26
New Orders49.649.60.0ContractingSame3
Production51.248.6+2.6GrowingFrom Contacting1
Employment53.851.8+2.0GrowingFaster24
Supplier Deliveries51.450.6+0.8SlowingFaster28
Inventories52.052.3-0.3GrowingSlower2
Customers' Inventories49.046.5+2.5Too LowSlower30
Prices56.055.5+0.5IncreasingFaster27
Backlog of Orders41.546.0-4.5ContractingFaster4
Exports53.550.5+3.0GrowingFaster27
Imports54.555.5-1.0GrowingSlower25
OVERALL ECONOMYGrowingFaster28
Manufacturing SectorGrowingFaster26

*Number of months moving in current direction.