U.S. equities moved higher on Monday in what was a relatively quiet session.
The main catalysts were out of Asia. The April China Manufacturing PMI Activity Index came in below estimates, raising hopes of more stimulus measures out of Beijing. The employment sub-index came in at 47.8 vs. 48.1 in the prior month. Any reading under 50 indicates contraction.
And in Japan, Finance Minister Taro Aso reiterated concerns about the yen’s recent strength calling the rise one-side and speculative. He added the government will closely monitor the situation and take action if necessary — which lifted the spirits of hedge fund types being squeezed in losing “yen carry trade” positions.
In the end, the Dow Jones Industrial Average gained 0.7%, the S&P 500 gained 0.8%, the Nasdaq Composite gained 0.9% and the Russell 2000 gained 0.9%. Treasury bonds weakened, the dollar moved lower, gold gained 0.2% and crude oil lost 2.2% to close at $44.90 a barrel.
Consumer discretionary stocks led the way with a 1.4% gain while energy stocks were the laggards, up only a fraction. Technology stocks wafted up 44 basis points, but Apple Inc. (NASDAQ:AAPL) didn’t get the memo, instead falling 11 basis points to mark its longest losing streak since 1998.
Wynn Resorts, Limited (NASDAQ:WYNN) gained 6.8% after Macau gaming revenue dropped less than expected. GNC Holdings Inc (NYSE:GNC) rose 6.8% after the board announced it is looking at a wide range of strategic and financial options after reporting poor quarterly results.
Baidu Inc (ADR) (NASDAQ:BIDU) lost 7.9% after Reuters reported China’s internet regulator said it will investigate the company over the death of a university student who used the search engine to look for treatments for his cancer. Groupon Inc (NASDAQ:GRPN) lost 3.6% after being downgraded to underperform by analysts at RBC citing deteriorating fundamentals.
Halliburton Company’s (NYSE:HAL) plans to merge with Baker Hughes Incorporated (NYSE:BHI) was called off under the pressure of regulatory antitrust opposition, torpedoing a $28 billion deal.
On the economic front, the April ISM manufacturing activity index came in below expectations but remained in expansionary territory. New orders and production grew at a slower pace, inventories continued to fall, and employment improved but remains in contractionary territory for the fifth straight month.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
