While you were sleeping: Fresh Wall Street highs
June 3 (BusinessDesk) – Wall Street moved to record highs, though equities seesawed, as investors digested two corrections of the latest monthly Institute for Supply Management’s manufacturing data.
In the final hour of trading in New York, the Dow Jones Industrial Average rose 0.14 percent, while the Standard & Poor’s 500 Index added 0.06 percent. The Nasdaq Composite Index fell 0.30 percent.
Earlier in the day, the Dow rose to a record 16,746.81, while the S&P 500 climbed to a high of 1,925.38.
The Institute for Supply Management’s manufacturing index strengthened to 55.4 in May, up from 54.9 a month earlier. ISM corrected its May data twice after incorrect seasonal adjustments. ISM first reported the gauge fell to 53.2 in May, then said the correct reading was 56.0, before finally correcting it to 55.4.
"People are still looking for signs that the economy is recovering, and the first ISM number had people questioning the strength of the economy," John Carey, portfolio manager at Pioneer Investment Management in Boston, told Reuters. "This revision gives us more reason to be confident, and it isn't surprising to see stocks recover a bit, since we’re so sensitive to data right now."
On Friday the government will release its monthly jobs report. Employers in the US probably added more than 200,000 jobs in May for a fourth straight month, according to a Bloomberg survey, while the unemployment rate probably rose to 6.4 percent from 6.3 percent in April.
Shares of Broadcom jumped, last up 10 percent, after the company said it will explore strategic alternatives for its cellular baseband business.
"It's overdue, but definitely good news," Ascendiant Capital Markets analyst Cody Acree told Reuters. "We have said in 2014 wireless was make or break for Broadcom—either they share some proven success or get out of the business, or it probably cost the CEO his job."
In Europe, the Stoxx 600 Index finished the session with a 0.2 percent gain from the previous close. Germany’s DAX added 0.1 percent, while the UK’s FTSE 100 rose 0.3 percent. France’s CAC 40 slipped 0.1 percent.
Investors are eyeing the European Central Bank’s meeting on Thursday amid expectations policy makers will take action to help bolster the euro-zone economy.
Markit’s euro-zone manufacturing PMI slid to 52.2 in May, down from 53.4 in April. The final seasonally adjusted reading was the lowest reading in six months and came in below the earlier flash estimate of 52.5.
“The May drop in the manufacturing PMI will inevitably add to the clamour for policymakers to provide a renewed, substantial boost to the region’s economy and ward off the threat of deflation,” Chris Williamson, Markit’s chief economist, said in a statement. “However, the case is not so clear-cut.”