By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks moved in and out of
negative territory as the Institute for Supply Management admitted
an error in calculating its manufacturing index and released
revised data.
The U.S. manufacturing sector expanded at a faster pace in May,
the Institute for Supply Management said Monday after twice
correcting an error in its seasonal-adjustment calculations that
led to a downbeat reading in the index.
The benchmark S&P 500 and the Dow Jones Industrial Average
hit record intraday levels in early trade and hovered near those
levels.
Earlier, upbeat manufacturing data from China lifted sentiment
globally, but enthusiasm on Wall Street was dampened by economic
releases.
The S&P 500 (SPX) was up less than a points at 1,923.82. The
Dow Jones Industrial Average (DJI) added 18 points, or 0.1%, to
16,736.25. The Nasdaq Composite (RIXF) was down 10 points, or 0.2%,
at 4,232.42.
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action.
"The correct headline suggests that the economy continues to
heal from the first quarter slump. In particular, the new orders
component is encouraging," said Quincy Krosby, market strategist at
Prudential Financial.
"The economy is improving, but not as fast as investors hoped
for," Chris Gaffney, senior market strategist at EverBank Wealth
Management.
"We expect the market to keep grinding higher. However, with
volatility at low levels, there is a fear among investors and
everyone is waiting for that big 'black swan' event," he added.
American manufacturers grew in May at the fastest rate of 2014,
as almost every major sector showed improvement, according to a
index that was corrected Monday. The ISM revised its main gauge of
manufacturing activity to 55.4 in May from April's 54.9, according
to press reports.
The first incorrect report showed that U.S. factories slowed
their pace of expansion to 53.2 in May, sending stocks lower and
prompting some economists to question the numbers. Read: ISM and
the parade of wrong numbers.
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 in Ventas fell 3.2%.
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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