Stocks opened lower Monday as a result of an Institute of Supply Management (ISM) report that showed an unexpected slowdown in the manufacturing sector in May. But they regained the losses when an error was discovered in the data, and the report was amended with results that met expectations.
The incorrect data led to an across-the-board decline, but the rally back was led by S&P 500 and Dow stocks, while the Nasdaq and Russell 2000 never fully recovered.
Several stocks made news-related moves. Apple (AAPL) fell 0.7% after it announced plans for a new operating system. Broadcom (BRCM) jumped 9.3% after announcing a potential sale of its cellular business. Google (GOOGL) fell 1.3% after The Wall Street Journal reported the company plans to spend $1 billion on a satellite aimed at spreading the Internet to unwired regions of the world. American Realty Capital Healthcare Trust (HCT) surged 9.7% following its acquisition by Ventas (VTR), which fell 2.8%.
At Monday’s close, the Dow Jones Industrial Average gained 26 points at 16,744, the S&P 500 rose over 1 point to 1,925, and the Nasdaq fell 5 points to 4,237. Volume was again light with the NYSE’s total volume at 2.5 billion shares and the Nasdaq trading just 1.6 billion shares. Decliners outpaced advancers on the Big Board by 1.1-to-1 and by 1.6-to-1 on the Nasdaq.
Like the Dow and S&P 500, the NYSE Composite broke through resistance last week. It continued the slow advance Monday, closing near its high of the day. MACD is very bullish. Support is first at the breakout line of 10,710, then the 20-day moving average at 10,655, and the 50-day at 10,559.
Even with the mix-up in the ISM report, the small caps had a tough time getting back to breakeven. The daily range of the Russell 2000 is narrowly confined to its 50-day and 200-day moving averages. MACD is bullish but curving down.
Conclusion: It doesn’t get more boring than Monday’s messy trading. Even though the false data that was later corrected resulted in some volatility, volume was again lacking. The quality stocks are on a plodding rampage to new highs, but second tier stock buyers are just not getting the message.
They say “never sell a dull market,” but won’t someone buy?
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.