The U.S. services sector contracted less severely in April, according to a report on Tuesday that will raise more hopes that the world's largest economy has hit bottom and may now begin to recover.
The Institute for Supply Management's non-manufacturing index rose to 43.7 from 40.8 in March.
Economists had forecast a smaller rise to 42.0 in the index, where any reading below 50 denotes contraction.
The services sector represents about 80 percent of U.S. economic activity, including businesses like banks, airlines, hotels and restaurants.
(Reporting by Burton Frierson, Editing by Chizu Nomiyama)