By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market ended Monday
generally higher, with the S&P 500 and Dow Jones Industrial
Average closing at record levels.
The main benchmarks moved lower in early trade, after the ISM
reported erroneous data showing a downbeat reading in the
manufacturing index. Stocks regained footing in the afternoon, once
correct data on manufacturing showed factories grew at the fastest
pace this year.
Marginal gains on the S&P 500 helped the benchmark close at
a record level for the 15th time while the Dow closed at a record
for the sixth time this year.
The S&P 500 (SPX) closed 1.40 points, or 0.1%, higher at
1,924.97. The Dow Jones Industrial Average (DJI) added 26.46
points, or 0.2%, to 16,743.63. The Nasdaq Composite (RIXF) ended
the day down 5.42 points, or 0.1%, at 4,237.20.
Read the recap of MarketWatch's live blog of today's
stock-market 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 9.9%
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 9.7% on news that Ventas Inc. (VTR) has agreed to buy the
company in a $2.6 billion deal. Shares in Ventas fell 2.9%.
Shares of Apple Inc. (AAPL) fell 1.5% as investors were less
impressed with the company's new iOS8 released at the WWDC than the
developers.
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 2.8%, 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 6.9% after the retailer beat
analysts' first-quarter profit and sales estimates.
After the market closed Monday, Krispy Kreme (KKD) shares
dropped nearly 10% after revenue missed Wall Street's forecast of
$125.4 million, according to consensus estimates from FactSet.
Quiksilver Inc. (ZQK) shares tumbled 25% after the company
reported a larger-than-expected fiscal second-quarter loss.
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.
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) settled lower
for a sixth straight session. Crude oil for July delivery (CLN4)
fell to mark their lowest close in nearly two weeks.
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