Asian stocks rose for a third day after Mitsubishi UFJ Financial Group Inc. returned to profit and manufacturing in China expanded. Mitsubishi UFJ gained 4.4 percent after Japan's biggest bank by market value reported its first profit in nine months.

A Chinese manufacturing index climbed to a one? year high in July as stimulus spending stoked domestic demand, countering a slump in exports. The CLSA China Purchasing Managers' Index rose to a seasonally adjusted 52.8 from 51.8 in June"Manufacturing activity continues to accelerate and, importantly, orders growth is being driven by the domestic economy," said Eric Fishwick, head of economic research at CLSA in Hong Kong. Overseas demand "remained lackluster," he said.

China's official Purchasing Managers' Index advanced to a seasonally adjusted 53.3 last month from 53.2 in June, the Federation of Logistics and Purchasing said on Aug. 1.

China may overtake the U. S. as the world's largest manufacturer by2015, according to economic forecaster IHS Global Insight. The U. S. unemployment rate may not peak until the second half of 2010, possibly necessitating another extension in unemployment benefits, U. S. Treasury Secretary Timothy Geithner said.

"I think that is something that the administration and Congress are going to look very carefully at as we get closer to the end of this year," Geithner said in an interview today on ABC's "This Week" program.

Stabilization of housing markets and consumer spending, a lessening of financial turmoil and increased government spending all suggest the longest recession since the 1930s may be close to ending.

Greenspan said yesterday the most severe recession in the U. S. in at least five decades may be ending and growth may resume at a rate faster than most economists foresee.

The dollar traded near a two? month low versus the euro as investors shifted toward higher? yielding currencies before a report forecast to show U. S. manufacturing improved to the highest level in almost year. The Institute for Supply Management is forecast to report today that its manufacturing index climbed to 46.5 in July, the highest level in almost a year.