British manufacturing output rose for the first time since March 2008. Big Japanese manufacturers reported being slightly more optimistic about business conditions, but cut capital spending sharply.

While encouraging, the ISM survey hasn't noted growth in manufacturing since January 2008. The manufacturing index includes new orders, production, employment, inventories, prices, and export and import orders. It is based on a survey of the Tempe, Ariz.-based ISM's members from 18 industries.

On Wall Street, stocks rose after the better-than-expected ISM manufacturing report. The Dow Jones industrial average added about 105 points in afternoon trading, and broader indices also moved higher.

But not all the economic news was as rosy. A Commerce Department report showed that construction spending fell 0.9 percent in May, nearly double the 0.5 percent economists had expected, and activity in the past two months was revised lower.

Construction rose 0.6 percent in April, down from the 0.8 percent increase originally reported. A March increase of 0.4 percent was replaced with a decline of the same amount. That left the April gain as the only increase in the past eight months.

The National Association of Realtors, meanwhile, said pending home sales rose for a fourth straight month in May. The index of pending sales, which tracks signed contracts to purchase previously owned homes, rose 0.1 percent to 90.7, better than expected.

Housing and autos are two sectors with ongoing woes, Ore said, while manufacturers connected to the computer, electronics and petroleum industries might say their tides have turned.