A report showing the manufacturing sector weathered the impact of hurricanes Katrina and Rita in September surprisingly well could have been reason to cheer. But if there was any cheering, it was from those betting against stocks and bonds. The Institute for Supply Management's manufacturing survey fueled mounting concerns about inflation, and supported the case that the Federal Reserve will again hike rates at its next meeting in November. The ISM said its manufacturing index jumped to 59.4 in September from 53.6 in August. That was well above expectations for the index to dip to 52.0. But markets focused on a key gauge of inflationary pressures inside the ISM report: The survey's prices paid index skyrocketed to 78 from 62.5. "While energy prices and the impact from Hurricane Katrina are major concerns, the manufacturing sector has regained significant momentum," said Norbert Ore, chairman of the ISM business survey committee. Firms indicated they had boosted orders and production on expectations that materials may become scarce because of Katrina-related disruptions. They also expect business activity to pick up as part of the post-hurricane reconstruction. The economic resilience could have been enough to convince the Fed to continue lifting rates by itself; in conjunction with the prices paid index, it almost certainly will. In part in reaction to the ISM data, the Dow Jones Industrial Average was recently down 0.3%, at 10,537. The S&P 500 was down 0.2% at 1226.51. Merger news and a dip in crude -- oil was recently down 48 cents at $65.75 on Nymex -- helped prevent wider losses. The Nasdaq Composite was recently up 0.2%, at 2156.13. Besides lower oil, the tech-heavy index remained supported by news that Symantec ( SYMC) said it will acquire information technology company BindView ( BVEW) for $209 million. Also, Google ( GOOG) was higher on word that it plans a collaboration with Sun Microsystems ( SUNW), which was recently up 7% in heavy volume on the news.