UPDATE: NASDAQ is now back online


By Justin Menza CNBC.com

(CNBC) - Stocks rose strongly on Thursday before a technical glitch led to a halt in trading in Nasdaq securities at about 12:20 p.m. Markets had been rising on encouraging manufacturing data out of the U.S., China and euro zone. But uncertainty persists as to when the Federal Reserve may begin to reduce its monthly bond purchases.

All Nasdaq options markets halted trading due to an equity securities processor issue. The exchange said it is halting all Tape C securities until further notice. "Tape C" are those stocks listed on the Nasdaq or Nasdaq Small Cap exchange. Nasdaq recommends firms route all open orders elsewhere. The NYSE has also halted trading in all Nasdaq securities at the request on Nasdaq. NYSE listed securities continue to trade, according to the NYSE.

The Dow Jones Industrial Average posted a solid gain, its first in seven sessions, led by Microsoft and Alcoa. Hewlett-Packard was a drag, down sharply after its earnings report on Wednesday. Despite today's fall, HPQ is still the best Dow stock this year, with a gain of 55 percent

The S&P 500 and the Nasdaq were surging after recent weakness. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 16.

Among S&P sectors, energy and financials were higher while telecoms weakened.

Global data encouraging, Fed fears linger
The latest jobless claims report showed a rise in initial claims to 336,000, a bit higher than the 330,000 economists were looking for. July leading indicators rose 0.6 percent, a bit better than the 0.5 percent increase expected.

Meanwhile, financial data firm Markit said its "flash" U.S. manufacturing purchasing managers index rose to 53.9, its best showing since March.

"I do think the economy is in better shape than most people think, and that's why i think this setback over the last few days is a buying opportunity," Jim McCaughan of Principal Global Investors said.

In global economic data, HSBC's preliminary reading of Chinese PMI for August crossed the key 50-level for the first time in four months thanks to a rebound in new orders. The data was the latest sign of stabilization in China, and boosted sentiment after July's reading of 47.1, which marked an eleven-month low.

"China's manufacturing growth has started to stabilize on the back of modest improvements in new business and output. This is mainly driven by the initial filtering through of recent fine-tuning measures and companies' restocking activities," said Qu Hongbin, the co-head of Asian economic research at HSBC.

European markets closed higher after Germany's PMI for August climbed to 53.4, up from 52.1 in July. Broader euro zone PMI data also beat expectations.

"They're certainly good numbers, and we've been seeing this for the last four or five months in Europe," Richard Jerram, chief economist at the Bank of Singapore, told CNBC. "It does seem that as the headwinds from fiscal tightening fade, then the economies are starting to lift."

There remains ongoing uncertainty as to when the Fed will start tapering its massive stimulus program, however. Minutes from the central bank's last policy meeting, released on Wednesday, showed the Fed is preparing to start tapering, but provided little indication as to when it might do so.

UBS economist Maury Harris told CNBC, "The Fed is just apparently unable to send any kind of consistent message about what they're up to." Harris expects tapering to start in the fourth quarter, but it could be a "tiny taper" and "hardly enough to make any kind of difference."

The annual Fed symposium will start in Jackson Hole, Wyoming, on Thursday evening. Fed Chairman Ben Bernanke will break with tradition and not attend this year,and there will be plenty of speculation at the meeting as to who will replace him in January.