U. S. stocks rallied, sending the Standard & Poor's 500 Index to a seven? month high, after reports on personal income, manufacturing and construction beat economists' forecasts. Treasuries fell for the first time in three days and the dollar weakened to its lowest level of 2009.

The US PMI rose to 42.8 in May vs. 40.1 April and consensus estimate of 42.0. Construction spending unexpectedly surged in April.

Construction outlays advanced 0.8% after rebounding 0.4% in March. The April gain came in much better than the market estimate for a 0.8 % decrease. Personal income jumped 0.5% in April, following a 0.2% fall in March. The increase in April was far better than the consensus forecast for a 0.2% drop. Unfortunately, the income gain was largely due to increased government social benefit payments, including unemployment insurance.

General Motors Corp., the largest manufacturer to go bankrupt, filed for court protection with a government? financed plan intended to create a viable company that can compete in world markets.

The U. S. government will extend $50 billion of loans to the 100? yearold automaker and plans to convert that into a 60% stake in the reorganized company, according to a filing in U. S. Bankruptcy Court in New York. GM today missed a deadline to show that it could reorganize outside of court and reported debt of $172.8 billion, more than twice its assets.

China's former central bank adviser Yu Yongding will meet Treasury Secretary Timothy Geithner today and tell him the U. S. shouldn't be complacent about China continuing to buy Treasuries. "I wish to tell the U. S. government: 'Don't be complacent and think there isn't any alternative for China to buy your bills and bonds'," Yu said in an interview yesterday. "The euro is an alternative. And there are lots of raw materials we can still buy."

China is concerned that the U. S.'s spending and planned record fiscal deficit will eventually lead to inflation and a loss of confidence in the dollar, undermining the value of China's Treasury holdings, Yu said. Asian stocks rose after U. S. economic data added to signs the global recession is abating and General Motors Corp.'s bankruptcy raised optimism Asia's automakers will gain market share.

Stocks in Asia excluding Japan may post their best annual gain in 16 years, with a benchmark index set to rise a further 21% this year as the region's economies recover, JPMorgan Chase & Co. said yesterday in report.

Today Indian equity markets are expected to open positive but will see profit booking in later part of day.