Gain in services powers stocks; Dow up nearly 200

(AP) -- Stocks surged to their highest level in five months Tuesday after a measure of the most important driver of the U.S. economy surged ahead in September, a hopeful sign for the country's main source of employment.

A surprise move by the Bank of Japan to cut its key interest rate to virtually zero also lifted stocks worldwide. The dollar fell as investors shed defensive assets, and a gauge of U.S. stock market volatility fell.

The Institute for Supply Management reported that its index of business activity at U.S. service companies expanded again last month, and far faster than analysts were expecting. The ISM's measure of service companies encompasses a wide range of industries including finance, health care and trade.

It was the ninth-straight month of expansion in service businesses, which have been growing at a slower pace in the U.S. relative to the much smaller manufacturing sector. Service providers account for about 83 percent of all private employment in the U.S. (more)