U.S. Stocks Move Mostly Higher Despite Weaker Than Expected Manufacturing Data
(RTTNews) - Stocks have moved mostly higher in morning trading on Monday, largely offsetting the weakness seen in the previous session. The major averages have all moved to the upside, although buying interest has remained somewhat subdued.
Currently, the major averages all remain in positive territory. The Dow is up 192.40 points or 0.6 percent at 35,127.87, the Nasdaq is up 62.32 points or 0.4 percent at 14,734.99 and the S&P 500 is up 20.36 points or 0.5 percent at 4,415.62.
The strength on Wall Street partly reflects recent upward momentum, which has helped lift stocks to new record highs despite concerns about the spread of the delta variant of the coronavirus.
Traders remain optimistic about the outlook for the economy amid indications the Federal Reserve is not in a hurry to begin scaling back stimulus.
Positive sentiment may also have been generated after a bipartisan group of Senators unveiled a nearly $1 trillion infrastructure package.
Senate Majority Leader Chuck Schumer, D-N.Y., said he believes the Senate will vote to approve the massive bill in a matter of days.
Meanwhile, traders have largely shrugged off a report from the Institute for Supply Management showing an unexpected slowdown in the pace of growth in U.S. manufacturing activity in the month of July.
The ISM said its manufacturing PMI dipped to 59.5 in July from 60.6 in June. While a reading above 50 still indicates growth in the manufacturing sector, economists had expected the index to inch up to 60.9.
A separate report from the Commerce Department showed construction spending crept up by less than expected in the month of June.
Later this week, trading may be impacted by reaction to the Labor Department's closely watched report on the employment situation in the month of July.
Economists currently expect employment to spike by about 900,000 jobs in July after surging by 850,000 jobs in June. The unemployment rate is expected to dip to 5.7 percent from 5.9 percent.
Airline stocks are turning in some of the market's best performances in morning trading, resulting in a 1.9 percent advance by the NYSE Arca Airline Index.
Considerable strength is also visible among financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index climbing by 1.5 percent and 1.4 percent, respectively.
Semiconductor stocks are also seeing significant strength on the day, driving the Philadelphia Semiconductor Index up by 1.5 percent.
Energy, tobacco, and housing stocks have also moved notably higher on the day, while some weakness has emerged among gold stocks.
In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Monday. Japan's Nikkei 225 Index spiked by 1.8 percent, while China's Shanghai Composite Index soared by 2 percent.
The major European markets have also moved to the upside on the day. While the German DAX Index has inched up by 0.2 percent, the U.K.'s FTSE 100 Index is up by 0.7 percent and the French CAC 40 Index is up by 1 percent.
In the bond market, treasuries have moved notably higher in reaction to the weaker than expected manufacturing data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.3 basis points at 1.186 percent.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.