The U.S. services sector activity surged to more than a 3-1/2-year high in February amid strong demand, consistent with hopes for an acceleration in economic growth this quarter, but war in the Middle East poses a downside risk to the rosy picture. The Institute for Supply Management said on Wednesday its nonmanufacturing purchasing managers index increased to 56.1 last month, the highest reading since July 2022, from 53.8 in January. Economists polled by Reuters had forecast the services PMI easing to 53.5.