REUTERS/ Heinz-Peter BaderMembers of the State Opera ballet dance during a dress rehearsal of ‘Etudes’ in Vienna December 12, 2013.
Stocks lost ground in the final hour of trading but held on to gains to start June in the green.
First, the scoreboard:
- Dow: 18,097.61, +86.93, (0.48%)
- S&P 500: 2,118.09, +10.70, (0.51%)
- Nasdaq: 5,096.18, +26.15, (0.52%)
And now, the top stories on Monday:.
- Economic data was plenty in the morning. In manufacturing numbers, the Purchasing Manager’s Index reading from Markit Economics came in at 54.0 in May, falling from the previous month but beating the forecast for 53.8. New orders rose at the slowest pace so far this year while manufacturing job creation grew at the fastest pace since November 2014. And, the ISM Manufacturing index rose in May, coming in at 52.8 and beating expectations for 52.0.
- Personal income rose 0.4% (0.3% expected) and spending was flat (0.2% expected) in April. The Personal Consumption Expenditures index, a measure of inflation, rose 0.1% month-over-month and 0.2% year-over-year on a “core” basis, which strips out the volatile costs of food and energy. Including these items, prices were flat in April and rose 0.1% year-over-year. “The April income and spending figures are another reminder that even though their incomes are rising at a healthy pace, households are still reluctant to boost spending more freely,” wrote Capital Economics’ Paul Ashworth in a note to clients after the data.
- Construction spending rose 2.2% in April, more than economists’ expectations for a 0.7% decline after a drop by 0.6% in March. In a note to clients after the data, Barclays economists wrote, “Upward revisions to Q1 data, including private residential, private nonresidential and public nonresidential construction spending imply a modest upward revision to investment figures in Q1 GDP. Together, these boosted our Q1 GDP tracking estimate one-tenth to -0.6%.”
- Intel is buying Altera for $US54 a share in an all-cash deal worth $US16.7 billion. Altera had rejected an unsolicited offer in April. Intel, the world’s largest chipmaker, is looking to expand into making chips for products like smart cars, beyond just those used in personal computers. This announcement follows news just last Thursday that Avago Tech is buying Broadcom for $US37 billion — the biggest deal in the semiconductor industry. Altera shares jumped as much as 6%; Intel shares fell by around 1%.
- GoPro shares soared about 7% after it announced a new camera. The GoPro Hero+ LCD is a touchscreen device that features built-in WiFi and Bluetooth, can record 1080p60 video, and boasts up to two hours of recording time. Last Thursday, GoPro shares rallied by 7% after CEO Nick Woodman said that the company is developing a six-camera virtual-reality recording system and a drone.
- Former Fed chair Ben Bernanke says stocks may not be overvalued, after all. In a new blog post, he wrote, “Stock prices have risen rapidly over the past six years or so, but they were also severely depressed during and just after the financial crisis. Arguably, the Fed’s actions have not led to permanent increases in stock prices, but instead have returned them to trend.” Over the weekend, Yale professor and Nobel Laureate Robert Shiller said there is a “bubble element” to stocks, although he didn’t go as far as calling it a classic bubble.
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