After a rocky start to the day, stocks rallied into the close to start February on a positive noted, with the Dow gaining triple digits and the S&P 500 adding nearly 1%.
First, the scoreboard:
- Dow: 17,360.6, +195.6, (+1.1%)
- S&P 500: 2,019.2, +24.3, (+1.2%)
- Nasdaq: 4,674, +40, (+0.9%)
And now, the top stories on Monday:
1. We got a flood of economic data on Monday morning, headlined by the latest personal income and spending report, which showed that personal spending fell more than expected in January while incomes were better than forecast. In December, personal spending fell by 0.3%, more than the 0.2% decline that was forecast by economists. Personal income, however, rose 0.3%, better than the 0.2% increase that was expected. This report also included the latest PCE inflation measure, which showed that prices fell 0.2% in December, slightly less than the 0.3% decline that was forecast and over the prior year, prices rose just 0.7%, the smallest increase since October 2009. “Core” PCE, which strips out the more volatile price of food and energy, was flat in December.
2. Manufacturing data on Monday showed that manufacturing activity expanded at a slower pace in January than was expected by Wall Street economists. ISM’s latest manufacturing index came in at 53.5, down from 55.1 in December and missing expectations for a reading of 54.5. This was also the lowest reading in a year. Markit’s latest manufacturing PMI just beat expectations, coming in at 53.9 compared to 53.7 last month, with Markit’s Chris Williamson saying of the report that manufacturing, “remains in a lower gear compared to that seen last summer.”
3. In corporate news, RadioShack appears one step closer to going out of business after a report from Bloomberg said the company is in talks with Sprint to sell the wireless carrier half of its stores and close the other half.
4. Shake Shack shares had a lackluster day amid broad-market gains as the burger chain fell about 3.5% after more than doubling in its market debut on Friday.
5. The price of oil rallied more than 3% on Monday, adding to its 8% gains from Friday as West Texas Intermediate crude prices closed in on $US50 a barrel, a more than 10% gain from their lows hit last week. The rally in oil prices was being partially attributed to a decline in the number of US oil rigs in use, though a note from analysts at Morgan Stanley warned against making this connection as the first batch of rigs to be shuttered were likely adding little to production outputs.
6. Apple announced on Monday that it’s going to issue more debt. In a filing with the SEC, Apple said it will issue 5-, 7-, 10-, and 30-year debt, with the size of the debt offer raised to $US6.5 billion after the iPhone maker initially filed to sell $US5 billion in debt.
7. Oil giant ExxonMobil reported earnings before Monday’s market open that topped expectations, with earnings per share coming in at $US1.56 against expectations for $US1.34. Exxon’s upstream earnings were down $US1.3 billion from the same quarter last year, but the company’s announcement didn’t contain any of the downbeat news for oil, gas, or the global economy that we’ve seen from other multinational giants in recent weeks.
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