The Dow and S&P 500 each made new record closing highs as U.S. auto sales in June accelerated to an annualized pace of 16.9 million vehicles.
First, the scoreboard:
- Dow: 16,956.07, +129.5, (+0.8%)
- S&P 500: 1,973.32, +13.1, (+0.7%)
- Nasdaq: 4,458.65, +50.5, (+1.1%)
And now, the top stories of the day:
1) U.S. auto sales hit an annualized pace of 16.9 million in June, better than the 16.4 million that was expected by analysts. Some of the notable monthly reports included GM, which reported sales that gained 1% against expectations for a 6.3% decline. GM’s sales report also comes on the heels of a more than 8 million vehicle recall announced yesterday, and late afternoon reports of an explosion at an Indiana plant. Chrysler sales grew 9.2% in June, better than the 5.9% increase that was expected, while luxury brand sales also surged: Mercedes-Benz sales rose 8.2%, Audi sales rose 23.1%, and Porsche sales rose 11%. BI’s Joe Weisenthal stressed earlier today that the auto report would be a huge barometer for the U.S. economy, and following the better than expected auto sales report, it appears the economy just passed a huge test.
2) The Institute for Supply Management’s latest June manufacturing report came in at 55.3, below expectations for 55.9. The report was also slightly worse than 55.4 reading reported in May. Following the report, Pantheon Macro’s Ian Shepherdson said, “This is a mildly disappointing at the headline, but the details are solid. The new orders index rose 2.0 points to a very high 58.9, boosted by favourable seasonals… Over the tone of the report is pretty solid, with respondents commenting that business is “strong,” “picking up,” and “slightly more favourable than last year.” Following the report, Capital Economics said the report points to U.S. GDP growth of 3% in the second quarter.
3) Markit’s final PMI report for June came in at 57.3, an increase from May’s 56.4 reading. The final index was a bit below the preliminary estimate of 57.5. Markit’s Chris Williamson said of the report, “Manufacturing may account for only 13% of US GDP, but the sheer pace at which the sector is growing means it will have provided a major boost to the economy in the second quarter. Importantly, factory activity remains an important bellwether for the performance of the rest of the economy. We therefore expect GDP to rise at annualized rate in excess of 3%, more than reversing the contraction seen in the first quarter.”
4) Construction spending rose just 0.1% in May, below the 0.5% that had been expected by economists. The growth rate for April, however, was revised up to 0.8% from 0.2%. Following the report, Pantheon Macro’s Ian Shepherdson said, “In one line: Housing finally falters; state and local government rebounding strongly,” adding that, “The details show new housing construction, ex-home improvement, fell 1.2% in May, the first outright decline since Sept ’11. New housing construction has been running ahead of the pace implied by new home sales so we have been waiting for this decline for some time.”
5) Wearable camera company GoPro had the fourth straight huge day since its initial public offering last Thursday, gaining more than 16%. Shares of GoPro were trading above $US48 for some of the session, more than double the $US24 mark they priced at last Wednesday.
6) In corporate news, Hormel last night announced the acquisition of CytoSport Holdings, which makes Muscle Milk-brand products, for $US450 million. CytoSport’s 2014 sales are expected to total $US370 million. In a statement, Hormel CEO Jeffrey Ettinger said, “The acquisition of CytoSport expands our offerings of portable, immediate, protein-rich goods, and broadens our appeal with younger consumers.”
7) The U.S. men’s soccer team was scheduled to take on Belgium in a round of 16 match at the World Cup, set to kick off at 4:00 pm EST.