Investing.com – Wall Street traded with slight gains on Monday as markets digested a string of comments from members of the Federal Reserve (Fed) and oil fought to hold onto $48.
At 15:14GMT or 11:14AM ET, the Dow 30 gained 31 points, or 0.18%, while the S&P 500 edged up 2 points, or 0.08%, and the tech-heavy NASDAQ Composite traded up 18 points, or 0.37%.
Stocks took a breather after the Dow closed last Friday with weekly losses of 0.2% which made the fourth consecutive negative week, equivalent to its worst stretch since October 2014.
On a very light economic calendar day, Markit’s May manufacturing purchasing managers’ index unexpectedly declined, creeping closer to stagnation in what was its weakest expansion since the upturn began in October 2009.
Markit chief economist Chris Williamson said that “the weak manufacturing data cast doubt on the ability of the U.S. economy to rebound from its disappointing start to the year in the second quarter”.
“The survey is signaling that manufacturing will act as a drag on economic growth in the second quarter, leaving the economy once again dependent on the service sector, and consumers in particular, to sustain growth,” he added.
With this weak manufacturing activity in mind, markets digested remarks from Fed officials as they continue to weigh the possibility of a rate hike coming in June.
Over the weekend, Boston Fed president Eric Rosengren said that the U.S. was close to meeting most of the economic conditions necessary for the central bank to proceed with the tightening of monetary policy.
In a different view on Monday, St. Louis Fed president James Bullard compared and contrasted the views of U.S. central bank assuming a gradual pace of rate increases over several years while the market was discounting “almost no normalization” and suggested that there was equal evidence for both views.
Meanwhile, San Francisco Fed chief John Williams later insisted that he expected there to be two or three rates hikes this year. He did admit however that he expected debate about a hike at the June meeting and was uncertain what the outcome would be.
In any case, markets still refused to believe that the Fed would move in June, with Fed fund futures discounting the odds at only 26%, still substantially higher than the 4% in the week prior to the publication of the Fed meeting minutes.
Still on the agenda, Philadephia Fed president Patrick Harker will give a speech after the market close at 22:30GMT, or 18:30ET.
In company news, Monsanto (NYSE:MON) shot up more than 5% in the pre-market after Bayer AG NA (DE:BAYGN) announced it would pay $62 billion to acquire the seed company.
In other M&A news, Tribune Publishing plummeted more than 16% after the owner of the Los Angeles Times and Chicago Tribune rejected a takeover offer from Gannett.
Staples Inc (NASDAQ:SPLS) gained more than 3% after it was also reported by the Sunday Times to have contacted firms about the possibility of selling off European assets. The office supplies retailer had fallen more than 20% since it cancelled the merger with Office Depot.
Meanwhile, oil prices were under pressure on Monday, giving back some of last week’s gains amid easing concerns over global supply outages.
Although a combination of Nigerian, Libyan and Venezuelan supply outages, as well as reduced production of Canadian crude as a result of fires in Alberta's oil sands region, had served to support the price of black gold, some of the supply disruptions were subsiding, shifting the focus back to the growth of global oil supply.
As the OPEC meeting on June 2 neared, traders were doubtful that any meaningful deal to curb production would be agreed.
However, losses were pared and black gold moved back above $48 on reports that Genscape data showed a one million barrel draw on inventories at the Cushing oil hub, the main delivery point for NYMEX oil and the largest storage facility in the U.S.
U.S. crude futures fell 0.60% to $48.12 by 15:16 GMT, or 11:16AM ET, while Brent oil traded down 1.09% to $48.19.