The manufacturing sector saw continued growth in the month of September, according to a report from the Institute for Supply Management, with the pace of growth accelerating unexpectedly. The faster growth came in spite of the impact of Hurricane Katrina.

The ISM said that purchasing managers index rose to 59.4 in September from 53.6 in August, reflecting the 28th consecutive month of growth in sector. Economists had expected the index to fall to 52.0 due to the hurricane.

Norbert J. Ore, C.P.M., chair of the ISM Manufacturing Business Survey Committee said, “While energy prices and the impact from Hurricane Katrina are major concerns, the manufacturing sector has regained significant momentum.”

The report showed significant increases in both new orders and production, with the new orders index rising to 63.8 in September from 56.4 in August while the production index rose to 63.1 in September from 55.9 in August.

Employment also saw continued expansion in September, with the employment index edging up to 53.1 in September from 52.6 in August. This marks the third consecutive month of expansion in employment in the manufacturing sector.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks finished broadly in the red on economic data release in Japan. The Nikkei declined 0.4% on lower-than-anticipated tankan survey, which shows the index of business confidence among Japanese companies. Although the report prompted buying of steel and other overvalued shares, Nippon Steel fell 1.6%, but exporter issues like Honda Motor and Toyota Motor gained on the back of a sixteen-month high dollar, buying 114.00 yen. Across the region, markets in Hong Kong, South Korea, and Australia ended down.

European markets finished up on a day of high merger-and-acquisition activity with U.K. pharmacy chains Boots and Alliance Unichem announcing a merger deal, and talk that Spain’s Telefonica is interested in acquiring the Dutch telecom KPN. Weaker euro also supported markets by giving a boost to export-related issues. The German DAX 30 rose 0.8%, the French CAC 40 gained 0.4%, while London’s FTSE 100 added 0.4%.

ENERGY, METALS, CURRENCIES

Oil prices edged up on expectations of higher heating oil demand with the approaching winter season for the Northern Hemisphere, and growing concerns over the oil production recovery. Light sweet crude for November delivery rose 9 cents to $66.33 a barrel on the Nymex. Gasoline added 2 cents to $2.11 a gallon. London Brent gained 15 cents to $63.63.

Gold prices slipped in European trading. In London the precious metal closed at $465.60 per troy ounce, down from $470.50. In Hong Kong gold slid $9.50 to $464.25. Silver finished at $7.36, down from $7.49.

In European trading the U.S. dollar further strengthened against the other major currencies The euro was quoted at $1.1913, down from $1.2018. The dollar changed hands at 114.25 yen, up from 113.60. The British pound was trading at $1.7533, down from $1.7633.

EARNINGS NEWS

The Mosaic Company (MOS: chart), fertilizer specialist, reported Q1 earnings of 18 cents a share, up vs. 16 cents a share in the same quarter last year. Sales for the period ended August 31 2005 totaled $1.4 billion, up vs. $720 million. Current earnings and sales figures resulted from the combined operations of the former Cargill Crop Nutrition and IMC Global Inc. Based on these companies’ combined results, the company would have earned 11 cents a share in the same quarter a year ago, on sales of $1.46 billion.

CORPORATE NEWS

NRG Energy (NRG: chart) announced it has agreed to acquire Texas Genco (LLC: chart) for about $4 billion in cash and $1.8 billion in stock. The deal also includes the assumption of about $2.5 billion in debt.

Exxon Mobil Corp. announced it has started production from the Sakhalin-1 Project in Russia. The first phase of the multiphase project is expected to produce 50,000 barrels a day of oil by the end of 2005 and 250,000 barrels a day at the end of 2006. The oil major also expects the gas production to reach 250 million cubic feet per day by the end of the decade.