--DJIA, industrial stocks slump after manufacturing data
--ISM manufacturing data show contraction in June for the first time since 2009
--S&P 500, Nasdaq pare losses and finish positive on hopes for central
bank action
--Europe's stocks rally on hopes for ECB rate cuts later this week
NEW YORK--Another weak reading on the U.S. economy dragged down the
Dow industrials. But hopes for action from global central banks helped
the S&P 500 trim early declines to finish higher for the fourth time
in five sessions.
Stocks initially moved sharply lower following a surprisingly weak
report that showed the U.S. manufacturing sector contracted in June
for the first time since 2009.
The Dow Jones Industrial Average fell 8.70 points, or 0.07%, to
12871.39 on Monday, after falling as many as 85 points soon after the
weak report.
Industrial-sector stocks fell sharply in the minutes after the report
and languished sharply lower throughout Monday's session. Dow
components General Electric, Caterpillar and Boeing all dropped more
than 1.5%. Heavy machinery maker Joy Global tumbled as the biggest
decliner on the S&P 500.
Major benchmarks pared losses in the early afternoon, however. Both
the Standard & Poor's 500 and the Nasdaq each finished in positive
territory after tumbling early. The S&P 500 rose 3.35 points, or
0.25%, to 1365.51 after dropping as much as 0.4% in the session's
first hour. The Nasdaq Composite rose 16.18 points, or 0.55%, to
2951.23.
Investors said speculation that global central banks might take
additional action to address slowing growth powered a late rally and
diminished the impact of weak factory activity.
"It's clear as a bell that investors are looking for unified action
across the globe," said Keith Springer, president of Springer
Financial Advisors.
European markets ended strongly higher, supported in part by
anticipation for the European Central Bank to cut interest rates later
this week. The Stoxx Europe 600 rose 1.5%.
Investors next will be looking to a series of reports this week on the
U.S. labor market, culminating in Friday's monthly jobs report.
However, low trading volumes are likely in the holiday-shortened week.
Exchanges are closing early Tuesday and will be closed Wednesday for
the Independence Day holiday.
"There are basically two schools of thought on this battle. Optimists
are encouraged by this grudging growth .. based on continued support
on the monetary side. Global central banks are moving to a more
stimulative mode," said Alan Gayle, senior investment strategist at
RidgeWorth Capital, who oversees $46 billion of assets. "This is
running up against fresh data that shows a continued slowdown, and
there's uncertainty about how deep that will be," Mr. Gayle said.
Asian markets were mixed as two sets of data suggested a slowdown in
Chinese manufacturing. China's Shanghai Composite edged up less than
0.1% while Japan's Nikkei Stock Average slipped less than 0.1%.
Crude-oil futures lost 1.4% to settle at $83.75 a barrel after surging
more than 9% in the previous session, the largest single-session
percentage gain since 2009. Gold futures declined 0.4% to settle at
$1,597.70 a troy ounce. The U.S. dollar rose against the euro but fell
against the yen. The yield on 10-year U.S. Treasury bonds fell to
1.580% as demand rose.
Deals drove many of Monday's biggest stock movers. Shares of Amylin
Pharmaceuticals climbed 8.9% after the diabetes-drug maker agreed to
be acquired by Bristol-Myers Squibb, which rose 0.3%, for $5.3
billion.
Micron Technology jumped 3.8% after agreeing to acquire Japanese rival
Elpida Memory for $750 million, in a move aimed at bolstering
competitiveness against rivals in South Korea and Taiwan.
Brightpoint soared 67% after the wireless-equipment provider entered
into a deal to be bought for about $622 million by Ingram Micro, which
rose 0.5%.
In other corporate news, Ampio Pharmaceuticals rose 6.9% after
entering into an agreement with India-based Syngene to manufacture a
combination product to treat sexual function in men.
Best Buy surged 5.9% amid continued speculation that founder and
former Chairman Richard Schulze is working to explore taking the
electronics retailer private.
Write to Chris Dieterich at christopher.dieterich@dowjones.com
(END) Dow Jones Newswires
July 02, 2012 06:55 ET (10:55 GMT)
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