Stocks changed course and finished strong after Friday’s weak jobs report had sent futures tumbling into the holiday weekend.
First, the scoreboard:
- Dow: 17,889.7, +126, (+0.7%)
- S&P 500: 2,081, +15, (+0.7%)
- Nasdaq: 4,918, +31, (+0.6%)
And now, the top stories on Monday:
- In economic data, Markit’s latest services PMI beat expectations yet again, coming in at 59.2 versus expectations of 58.6. “The latest survey highlights a strong underlying pace of US economic growth moving into the second quarter of 2015,” Markit’s Tim Moore wrote after the report.
- ISM’s non-manufacturing PMI was in-line with expectations, hitting 56.5 against expectations for 56.5. “Based on this survey, rumours of the demise of the US economy have been greatly exaggerated,” Capital Economics’ Paul Ashworth wrote following the release.
- West Texas Intermediate crude oil surged over 6% to as high as $US52.13 per barrel. Brent crude rallied by more than 5%. After a framework agreement on Iran’s nuclear program was reached last week, oil prices slumped, on concern that the removal of sanctions will flood the market with new supply.
- Citi downgraded Garmin to “Sell” on concern that the Apple Watch, which launches later this month, will erode its market share. In a note Monday, the analyst wrote that as Apple Watch gets cheaper and with the likely inclusion of GPS, Garmin faces “significant long-term headwinds.”
- Tesla shares jumped by up to 7% following the company’s better-than-expected vehicle deliveries report released Friday. The company said it delivered 10,030 cars, versus Bank of America’s estimate of 9,500. And while the market’s most bearish Tesla analyst found the numbers underwhelming, Pacific Crest said the disclosure signalled “increasing transparency.”
- Raymond James analysts upgraded Lumber Liquidators to “Outperform” after commissioning tests on its laminate flooring. In a note Monday, the analysts wrote that the disputed “deconstructive method” shown on CBS’ “60 Minutes” revealed excessive levels of formaldehyde, while a more controlled “Small Chamber” test showed levels that comply with regulations.
- The center of the world economy is shifting to China from America. In a Washington Post op-ed, the former Treasury Secretary and Harvard president Larry Summers wrote: “This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system.” With China’s imminent establishment of the Asian Infrastructure Investment Bank, backed by several large economies including Germany and Russia, the US failed to persuade its traditional allies to stay out, Summers wrote.
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