US stocks ended with good gains on Monday, 03 June, 2013. Stocks rallied on Monday, bouncing back from weekly losses, as investors gauged the impact of disappointing factory data on potential quantitative-easing moves by the Federal Reserve.
For the day, the Dow ended higher by 138.46 points (0.92%) at 15,254.03. Nasdaq ended higher by 9.46 points (0.3%) at 3,465.37. S&P 500 ended higher by 9.68 points (0.6%) at 1,640.42.
Twenty eight out of thirty Dow components ended higher led by Intel and Merck.
Merck rose 3.8% after the company presented the interim results of one of its trials while Intel gained 4.0% following the weekend public debut of its fourth generation processors.
While the afternoon rally enabled most sectors to erase their early losses, financials, homebuilders, and transportation-related stocks spectated from the sidelines. Major financials displayed mixed performance as Bank of America fell 0.8% while Goldman Sachs rose 0.9%. Meanwhile, the financial sector ended little changed.
The much-anticipated economic data from China over the weekend was a mixed bag for traders and investors. China's official purchasing managers' index rose to 50.8 in May versus 50.6 in April, which was higher than expectations. However, the HSBC China manufacturing PMI fell to 49.2 in May compared to 50.4 in April. Chinese stock markets weakened on the fresh economic data, but other markets saw little impact from the data.
Japan's stock market fell sharply again in overnight trading as it appears the major bull run in the Nikkei stock index has ended. The Nikkei has dropped by 17% in less than two weeks' time. The Euro zone's manufacturing sector activity fell at its slowest pace in more than one year in May, it was reported Monday. The Euro zone PMI rose to 48.3 in May from 46.7 in April. Any PMI reading below 50.0 suggests contraction. The decrease in the rate of decline in the PMI did hint the Euro zone economy has bottomed out and could be on the rebound.
Traders and investors will get some major economic news later this week when the European Central Bank holds its monthly meeting on Thursday, followed by Friday's U.S. employment report.
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In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.4%.
Regarding economic data expected at Wall Street, The ISM Manufacturing Index fell to 49.0 in May from 50.7 in April. That was the first contraction in the ISM Index since November 2012, and the lowest reading since June 2009. The consensus expected the index to increase modestly to 50.9.
Looking at today's remaining economic data, construction spending increased 0.4% in April after declining an upwardly revised 0.8% (from -1.7%) in March. The consensus expected construction spending to increase 1.1%. Residential construction, which was supposed to be a positive contributor to construction spending growth in April, fell 0.1%. The drop was the result of a sharp decline in home improvement spending (-3.2%).
Crude-oil prices ended moderately higher on Monday, 03 June 2013 at Nymex. Prices rose following a weak dollar and political instability in the Middle East. Mixed set of economic data at Wall Street also affected prices. Light and sweet crude for July ended higher by $1.48 (1.6%) at $93.45 a barrel on the New York Mercantile Exchange on Monday.
Bullion metal prices ended higher on Monday, 03 June 2013. Prices rose following weaker dollar and mixed set of economic report at Wall Street. Gold for August delivery ended higher by $18.9 (1.4%) at $1,411.9 an ounce on the Comex division of the New York Mercantile Exchange on Monday. July silver ended higher by $0.48 cents (2.2%) at $22.72 an ounce on Monday.
Indian ADRs ended mixed on Monday. In the IT space, Infosys was up 4% and Wipro was up 0.2%. In the Banking space, HDFC Bank was down 2% and ICICI Bank was down 2%. In the Telecom space, Tata Communication was down 5.2%. In other space, Tata Motors was down 0.4%, Dr Reddys was up 1.2% and Sterlite was up 0.3%.
Tomorrow's economic data will be limited to the 8:30 ET release of the April trade balance. The consensus expects a trade deficit of $41 billion to follow the March deficit of $38.8 billion.
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