By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Factory orders climb 2.1% in March, see first rise in eight
months
U.S. stocks finished modestly higher Monday, building on the
previous session's solid gains. The main indexes climbed amid low
volatility and lower-than-usual volumes.
Market reaction to a report on factory orders, which rose 2.1%
in March, generally in line with expectations, was mostly
muted.
The S&P 500 (SPX) closed 6.20 points, or 0.3%, higher at
2,114.49. The benchmark index settled just a few points below the
record level set on Friday. Financials led the index higher, with
seven of its 10 main sectors finishing with gains.
The Dow Jones Industrial Average (DJI) gained 46.34 points, or
0.3%, to 18,070.40, while the Nasdaq Composite (RIXF) added 11.54
points, or 0.2%, higher at 5,016.93.
Implied volatility has dropped to its lowest levels this year,
with the CBOE Volatility index (VIX) falling below 13. Meanwhile,
trading volumes on Wall Street on Monday were below the 30-day
average level.
Sohn Conference live blog: Einhorn takes aim at frackers
(http://blogs.marketwatch.com/thetell/2015/05/04/sohn-conference-live-blog-top-investors-make-their-picks/)
Maris Ogg, president at Tower Bridge Advisors, noted the markets
had been resilient as corporate earnings have been mediocre and
economic reports weaker than expected at times.
"Perhaps, markets are looking past the 2015 earnings and
discounting 2016 earnings, climbing higher. However, when stocks
are fairly priced and investors are nervous, as they are right now,
any bad news can result in a massive selloff," Ogg said.
Ogg noted that in a slow-growth environment, corporations are
able to adjust to imbalances without causing recessions. "When the
economy is growing at 2% pace, there is no impetus to hire or
invest in capital expenditures. Though, with wages ticking up and
labor market tightening, we expect companies will pick up in
capital spending," he noted.
Data: Orders for goods produced in U.S. factories rose 2.1% in
March. Economists surveyed by MarketWatch had expected orders to
climb 2.4% after a revised 0.1% decline in the prior month.
Wall Street is looking ahead to the nonfarm-payrolls report due
Friday. Forecasters predict job creation in April will rebound
after a disappointing 126,000 increase in March, the weakest
reading in 15 months.
Read: Roses or thorns? Wall Street awaits pivotal jobs report
for April
(http://www.marketwatch.com/story/roses-or-thorns-wall-street-awaits-pivotal-jobs-report-for-april-2015-05-03)
Stocks to watch: Cognizant Technology Solutions Corp. (CTSH)
shares jumped 6.2% after the company reported a 9.7% increase in
profits and 20% rise in revenues, well above expectations. The
stock was the best performer on the S&P 500 Monday.
Keurig Green Mountain Inc.(GMCR) shares dropped 4% ahead of its
earnings on Tuesday.
Corinthian Colleges Inc.(COCO) plunged 12% as the for-profit
school operator filed for chapter 11 bankruptcy.
McDonald's Corp. (MCD) shares fell 1.7% after chief executive
Steve Easterbrook unveiled turnaround plan that disappointed
investors.
For more on today's notable movers, read Movers & Shakers
(http://www.marketwatch.com/story/comcast-cablevision-tyson-foods-earnings-in-focus-2015-05-01).
Other markets: The German DAX 30 index closed up 1.4%, leading
gains for European stocks
(http://www.marketwatch.com/story/european-stocks-edge-lower-with-uk-market-closed-2015-05-04)
after the release of robust manufacturing data for the eurozone.
London markets are closed for a bank holiday.
China's Shanghai Composite Index , meanwhile, closed higher on
Monday
(http://www.marketwatch.com/story/china-shares-drift-lower-2015-05-03),
recovering from earlier losses after data showed the country's
manufacturing activity slowed more sharply than forecast. Tokyo
markets were closed for a holiday.
The dollar regained some strength on Monday, with the euro
(EURUSD) pulling back to $1.114, a 0.5% drop. Oil prices
(http://www.marketwatch.com/story/oil-prices-flatten-after-weak-china-factory-data-2015-05-04)(CLM5)
settled lower, falling 0.4% at $58.93. Gold futures
(http://www.marketwatch.com/story/gold-bounces-off-6-week-low-as-traders-eye-data-2015-05-04)(GCM5)
settled with a gain of 1.1%, at $1,186.80.
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