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ISM index records jump in April

The Institute for Supply Management's closely watched index of manufacturing activity jumped to 40.1 in April from 36.3 in March.

The US index remains below the 50 level that separates contraction from expansion, but reached its highest point in six months and is riding a four-month streak of gains from December's low of 32.9.

Many economists look at the ISM survey's 'new orders minus inventories' as a leading indicator for factory output.

The measure turned positive in March and continued to rise in April, to its fastest rate of new orders growth versus inventories since December 2004.

Other data showed new orders still were depressed as of March.

The Commerce Department said orders received by US factories fell in March for the seventh time in eight months.

Orders dropped by 0.9% in March after a revised rise of 0.7% in February, taking the net result for the two months to a decrease of 0.2%.