Stocks began the second half of 2013 with broad gains, weakening near the close after earlier lifting the Dow Jones Industrial Index past the 15,000 mark. Gains were supported by positive economic data at home as well as in Europe. Nine of the 10 industry sectors in the S&P 500 ended with gains, with utilities the lone group to finish in the red. Industrial and materials stocks were the day's best performers, with metals leading commodities to solid gains.
Manufacturing Growth
U.S. manufacturing as measured by the Institute for Supply Management monthly index grew in June, led by a pickup in new orders, exports and production. The ISM factory index increased to 50.9 in June, up from a four-year low of 49 in May. Readings above 50 suggests growth, while scores below that point indicate contraction.
European financial markets also were buoyed by better-than-expected manufacturing data, Monday, across the continent including Spain, Italy, France and the U.K.
PMI Misses
But a separate survey of U.S. factory activity showed a slight slowdown during June, trailing estimates but remaining in expansionary mode. The PMI Manufacturing Index came in with a 51.9 reading for June, missing the consensus call looking for a 52.3 score. New orders for export dipped, possibly reflecting a slowdown in demand from China. On the positive end of the ledger, production picked up moderately from May levels.
Construction spending similarly was mixed in May with private sector continuing its upward trend, offset by weak public sector growth. Overall, construction outlays advanced 0.5% month over month during in May, up 0.1 percentage point from April but lagging market expectations for a 0.6% gain. Private-sector residential spending rose 1.2%, rebounding from a 0.1% decline the prior month.
Commodities were higher. Crude oil for August delivery settled $1.43 higher at $97.99 per barrel while September natural gas was up a penny to $3.57 per 1 mln BTU. August gold rose $31.00 to finish at $1255.40 per ounce while September silver climbed 12 cents to $19.57 per ounce. September copper added 11 cents to $3.16 per pound.
Here's Where The U.S. Markets Stood At Day's End
- Dow Jones Industrial Index up 65.36 (0.44%) to 14,974.96
- S&P 500 up 8.68 (0.54%) to 1,614.96
- Nasdaq Composite Index up 31.24 (0.92%) to 3,434.49
- Hang Seng Index up 1.78%
- Shanghai China Composite Index up 0.81%
- FTSE 100 up 1.40%
- (+) P, Morgan Stanley upgrade to Overweight from Equalweight.
- (+) ONXX, Rejects $10-bln takeover bid by Amgen Inc (AMGN), saying the $120-a-share offer "significantly undervalues" the company but also saying it is talking with at least one other firm about a potential merger.
- (+) ACUR, Pfizer (PFE) says it will expand commercialization of pain drug that uses Acura's tamper-resistant Aversion technology.
- (-) IDCC, Administrative judge rejects company's claims of patent infringement by Nokia (NOK), Huawei and ZTE. IDCC will appeal to the full U.S. International Trade Commission; a final decision due Oct. 28.
- (-) INSM, Said U.S. regulators have granted Fast-Track designation for its Arikace drug candidate after the drug met its primary endpoint of similar efficacy with existing treatments in Phase III testing in cystic fibrosis patients with non-tuberculosis lung infections.
- (-) BBRY, Four analyst downgrades Monday following last week's disappointing earnings, including rating cuts by Societe Generale, Deutsche Bank and Needham & Co., among others.
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