Stocks rose on Monday, pushing the S&P 500 index above 1,000 for the first time in nine months, as data on the manufacturing sector underscored optimism that the economy was recovering. The Nasdaq closed above 2,000 for the first time since early October in an extension of the stock market's recent rally, which has been fueled by stronger?than?expected earnings and data suggesting the recession may be abating.

Adding to the positive mood, Ford Motor Co gained 4 percent to $8.33 as the auto maker reported its first year?over?year monthly sales increase since November 2007.

The U.S. Institute for Supply Management said its factory gauge jumped to an 11?month high of 48.9 in July, while economists had expected the index would rise to 46.5.

The dollar traded near a seven?month low against the euro before U.S. reports that may show pending home resales gained for a fifth month and consumer spending rose, reducing demand for safer assets. The Dollar Index, which the ICE uses to track the dollar against currencies of six major U.S. trading partners including the euro and the yen, traded at 77.603 from 77.571 yesterday

U.S. pending home resales rose 0.7 percent in June after a 0.1 percent gain in May, based on a Bloomberg News survey of economists before the National Association of Realtors’ report today. Consumer spending gained 0.3 percent in June after a 0.3 percent increase in May, a separate Bloomberg survey showed before the Commerce Department’s report today.

The U.S. Treasury cut its borrowing estimate for the July?to? September quarter as the economy stabilizes and spending on banking and housing rescue efforts is less than anticipated.

The Treasury expects to borrow a net $406 billion in the government’s fiscal fourth quarter, compared with a previous estimate of $515 billion, and $486 billion in the three months to Dec. 31. In the quarter that ended June 30, the Treasury borrowed $343 billion, compared with $361 billion projected three months ago. Treasury Secretary Timothy Geithner has pledged to return the budget shortfall to sustainable levels by 2013.

Asian stocks rose for a fourth day, paced by material producers, after commodities prices climbed, HSBC Holdings Plc and Panasonic Corp. earnings beat estimates and Hyundai Motor Co.’s sales gained in the U.S. A gauge of six metals in London gained 4.9 percent to a level not seen since Oct. 3. Crude oil rallied 3.1 percent to $71.58 a barrel in New York yesterday, the highest settlement since June 12.