It was another volatile day following a round of disappointing
(INDEXSP:.INX) futures were positive in the early going, but sank
lower into and after the release of two important economic numbers
The May ISM Manufacturing index was reported at 49.0, representing
a contraction in activity and coming below expectations of 50.5.
Likewise, April construction spending rose just 0.4%, easily
missing the consensus forecast of +0.9%.
The subsequent action fell into the "risk-off" category. US
Treasury bond prices rose, bucking their recent slump, while junk
bonds extended Friday's late-day collapse. We also saw serious
weakness in the
(INDEXRUSSELL:RUT) small-cap index, as well as in financials and
The high-beta realm, including stocks like
), as well as the biotechs, also took a serious hit.
However, the despair didn't last very long, as many of these areas
of the market staged intraday comebacks, one reason likely being
that weak economic data makes it unlikely that the Fed will taper
its QE activities. Dividend-paying stocks, notably utilities, had a
strong day, indicating that at least for one day, investors are
less fearful that the Fed will pull back and allow interest rates
In fact, by day's end, the major averages were firmly in the green.
Tomorrow's Financial Outlook
In earnings, 11 companies will be reportingtomorrow , the most
interesting of which is
). Many retailers have reported weak numbers as of late, and so
Dollar General may tell us if low-income consumers are suffering
and/or whether shoppers are moving down the premium curve.
On the economic front, we'll see the April trade balance reported
at8:30 a.m. EDT .
Nonetheless, even though the calendar is light, the market is
likely to stay volatile as tensions remain high, particularly since
we're heading into the May nonfarm payrolls reporton Friday .