Chemical Shares Rally After Positive Economic News

ERNEST SCHEYDER

NEW YORK (AP) — Shares of major chemical makers jumped Monday, as the broader markets rallied on positive reports about the state of American manufacturing, and consumer and construction spending.

The jump comes despite General Motors' bankruptcy filing. The automotive sector is a large customer for the chemical industry, buying paints, coatings and other products.

But investors seemed to discount that grim move, sending the Dow Jones industrial average, Nasdaq and Standard & Poor's 500 indices up more than 2 percent in midday trading.

The Commerce Department said Monday consumer spending fell by 0.1 percent in April, less than the 0.2 percent reduction forecast by economists. The government also said construction spending rose for the second-straight month in April by 0.8 percent, far better than the 1.2 percent decline expected.

And U.S. manufacturing activity also shrank at a slower pace in May, according to the Institute for Supply Management.

All that news offset GM's filing, which had been widely expected for some time.