US services sector gains in February, stocks break previous high

WASHINGTON (AFP) - The US services sector picked up pace slightly in February despite the impact of payroll tax hikes at the beginning of the year, the Institute for Supply Management said on Tuesday.

The ISM's non-manufacturing sector purchasing managers index rose to 56, up from January's 55.2. It was the highest level in a year, with the business activity sub-index gaining to 56.9 and the new orders reading surging 3.8 points to 58.2.

The pace of hiring was slightly slower and price rises picked up pace, the prices index rising 3.7 to 61.7, the ISM said.

Anything above 50 on the index indicates expansion of the sector.

"Thirteen non-manufacturing industries reported growth in February. The majority of respondents' comments reflect a growing optimism about the trend of the economy and overall business conditions," the ISM said.