By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks surrendered opening gains
and moved lower on Monday as investors assessed disappointing
manufacturing data.
The benchmark S&P 500 and the Dow Jones Industrial Average
hit record intraday levels but retreated after the release of the
economic reports.
U.S. manufacturing companies grew at a somewhat slower pace in
May, mainly because new orders and employment expanded more slowly,
a survey of executives found.
Earlier, upbeat manufacturing data from China lifted sentiment
globally, but enthusiasm was short-lived.
The S&P 500 (SPX) fell 5 points, or 0.3%, to 1,918.13. The
Dow Jones Industrial Average (DJI) lost 16 points, or 0.1%, to
16,700.41. The Nasdaq Composite (RIXF) dropped 26 points, or 0.6%,
to 4,216.49.
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action.
"After today's disappointing manufacturing reports, investors
are worried that we may not see a big pick-up in recovery in the
second half of the year," said Chris Gaffney, senior market
strategist at EverBank Wealth Management.
"With volatility at low levels, there is a fear among investors
and everyone is waiting for that big 'black swan' event," he
added.
The Institute for Supply Management said its manufacturing index
fell to 53.2% last month from 54.9% in April. That fell short of
the 55.8% forecast of economists surveyed by MarketWatch. Readings
over 50% indicate more companies are expanding instead of
shrinking, however.
Separately, the final Markit reading of U.S. manufacturing
conditions in May totaled 56.4, compared to a preliminary reading
of 56.2, the privately run firm said Monday. In April the index
registered 55.4.
Deal news sends Broadcom, Protective Life soaring
In corporate news, Broadcom Corp. (BRCM) shares surged 8.1%
after the company said Monday it hired J.P. Morgan to explore
options for its cellular baseband business, including a possible
sale or wind-down of the business.
Shares of American Realty Capital Healthcare Trust Inc. (HCT)
rallied 8.8% on news that Ventas Inc. (VTR) has agreed to buy the
company in a $2.6 billion deal.
Shares of Protective Life Corp. (PL) soared 12% after Dai-ichi
Life Insurance Co. said it is considering buying a life insurer, in
response to a Wall Street Journal report that it is mulling a $4.87
deal to buy Protective Life.
Shares of Allergan Inc. (AGN) were up 1.6%, after Valeant
Pharmaceuticals International Inc. (VRX) late Friday raised its bid
again for the Botox maker to $55 billion from $49.4 billion.
Shares of Conn's Inc. (CONN) jumped 6.3% after the retailer beat
analysts' first-quarter profit and sales estimates.
Asian, European stocks rise
Asia stocks rose on Monday, with the Nikkei 225 index surging
2.1%. China's latest official PMI index, which rose to a five-month
high, helped boost Asian markets. This helped to boost the U.S.
dollar back over 102 yen (USDJPY), which in turn benefitted
Japanese stocks. Chinese markets on the mainland and in Hong Kong
were closed for a holiday.
The strong Chinese data also helped European stocks, with gains
for the Stoxx Europe 600 driven by natural-resource firms.
In other markets, gold futures for August (GCQ4) edged up, while
crude oil for July delivery (CLN4) pushed lower.
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