US industrial output grew by a stronger-than-expected 0.7 per cent in February, as American firms operated at their fastest pace since August 2001, the Federal Reserve has said in a report.
A separate report from the Federal Reserve Bank of New York, however, showed business conditions in New York remained positive in March but fell from February's level. The two-year-old Empire Manufacturing Survey index fell to 25.33 from a record 42.05 in February, the regional Fed bank said.
Wall Street looked past both reports, though, and focused instead on security fears following last week's Madrid bomb blast.
A report from the National Association of Home Builders indicated the housing sector - one of the economy's bulwarks in the climb out of the 2001 recession - remains buoyant.
The builders' group said its housing index, which measures members' expectations for sales and buyer traffic, was steady at 64 in March, the same as in February.
It credited "highly favorable financing conditions" stemming from low interest rates for supporting robust construction and sales activity.
February's gain in industrial production exceeded Wall Street analysts' expectations for a 0.4 per cent increase. Capacity utilisation, which measures productive capacity in use, rose to 76.6 per cent from 76.1 per cent in January.
Factory production, which makes up more than four-fifths of overall industrial production, posted a 1.0 per cent rise in February. Manufacturing capacity in use increased to 75.2 per cent, its highest level since June 2001.
The report provided further evidence that the US manufacturing sector - hard hit by the 2001 recession and by companies' reluctance to invest in new equipment afterward - continues to recover, though at an uneven pace.
Earlier this month, the Labour Department said factory payrolls fell by 3,000 in February, their 43rd straight monthly decline. However, that was the smallest drop since a string of decreases began in August 2000.
"The gain in manufacturing activity was surprising in light of the results in the employment report, said Michael Moran, chief economist with Daiwa Securities America, in a research note.
Some of the gain, Mr Moran theorised, was probably from gains in productivity, or output per worker hour.
Within the New York index, the gauge of new orders also fell, dropping to 23.52 in March from 34.94. The index that tracks the number of employees also dipped, falling to 9.72 from 16.54 in February.
"These regional indexes are highly volatile from month-to-month and should be interpreted cautiously. Also, the latest monthly reading, although down sharply from February, was still high by historical standards," Mr Moran wrote.
Separately, the Treasury Department released a report showing net foreign purchases of US assets rose to $100.2 billion in January. Including transactions involving foreign stocks and bonds, the net inflow was a smaller $92.0 billion.