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Midday Update: ISM Correction Sends Equities To New Record Highs

Equities are grinding higher after an unexpected - albeit incorrect - drop in a key manufacturing indicator caused the major market indices to give back their opening gains. The Nasdaq Composite index continues to sag, however, with shares of Google ( GOOG ) underwater due to increased Chinese censorship before the 25th anniversary of the Tiananmen Square protests and Apple ( AAPL ) shares trading defensively ahead of its developers' conference starting today in San Francisco.

New mergers activity announced Monday was lending support to stocks, starting with Ventas ( VTR ) making a $2.6 billion bid for American Reality Capital Healthcare Trust ( HCT ) while and Japan's Dai-Ichi Life Insurance reportedly mulling a $5 billion bid for Protective Life Corp ( PL ).

Due to a software glitch, the Institute for Supply Management initially said that its manufacturing index fell to 53.2 from 54.9 in April, missing estimates for a gain to 55.5. But once the error was reported and the May index was revised to a better-than-expected 56.0, stocks recovered and inched back towards new record levels.

In other economic news, the Purchasing Managers manufacturing index for May strengthened to 56.4 from April's 55.4 and beating estimates for a gain to 56.2. Also, construction spending rose by a less-than-expected 0.2% in April.

European equities are mixed, but the UK and German indices were given a boost by signs of an improvement in Chinese manufacturing and continued expectations for lower EU-zone rates on Thursday. This morning's bearish German and EU manufacturing indicators gave the ECB more ammunition to introduce more stimulus measures at their policy meeting this week, fueling gains across Europe but causing the euro to continue to weaken against the dollar.

Crude oil was down $0.30 to $102.42 per barrel. Natural gas was up $0.02 to $4.56 per 1 million BTU. Gold was down $0.80 to $1,245.20 an ounce, while silver was up $0.08 to $18.76 an ounce. Copper was up $0.04 to $3.17 per pound.

Among energy ETFs, the United States Oil Fund was down 0.53% to $37.48 with the United States Natural Gas Fund was up 0.16% to $25.24. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 0.84% to 22.31 while SPDR Gold Shares were down 0.48% to $119.85. The iShares Silver Trust was down 0.28% to $18.03.

Here's where the markets stand at mid-day:

NYSE Composite Index up 5.80 (+0.05%) to 10,762.12

Dow Jones Industrial Average up 17.56 (+0.11%) to 16,734.73

S&P 500 up 0.38 (+0.02%) to 1,923.95

Nasdaq Composite Index down 10.11 (-0.24%) to 4232.51

GLOBAL SENTIMENT

Nikkei 225 Index up 2.07%

Hang Seng Index up 0.31%

Shanghai China Composite Index down 0.07%

FTSE 100 Index up 0.29%

CAC 40 down 0.08%

DAX up 0.07%

NYSE SECTOR INDICES

NYSE Energy Sector Index down 0.02%

NYSE Financial Sector Index up 0.09%

NYSE Healthcare Sector Index down 0.13%

UPSIDE MOVERS

(+) CONN (+6.05%) Reported better than expected Q1 earnings and revenue

(+) GIGA (+137.8%) Filter order from unnamed aerospace company

(+) ARIA (+8.51%) Details several positive study results

DOWNSIDE MOVERS

(-) CYTK (-5.81%) Tirasemtiv in ALS fails to meet primary endpoint

(-) NOV (-9.59%) Chairman Miller resigns to take role in spinoff NOW

(-) PBYI (-20.67%) PB272 results for breast cancer metastasized to the brain

(+) FREE (-8.52%) Settles $37.6 million debt with Credit Suisse

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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