U.S. stocks failed in an attempt to recover from May’s selloff, extending weakness as regulatory concerns pressured Google parent Alphabet, Amazon and Facebook, along with the communications and consumer discretionary sectors. Global growth concerns remained following disappointing manufacturing reports out of the U.S., U.K. and Eurozone, while trade skittishness lingered. Cypress Semiconductor rallied after agreeing to be acquired by Infineon Technologies. Treasury yields extended a recent drop and the U.S. dollar fell, while gold gained ground and crude oil prices added to last week’s fall.
The Dow Jones Industrial Average (DJIA) rose 5 points (0.02%) to 24,820, the S&P 500 Index declined 8 points (0.3%) to 2,744, and the NASDAQ Composite fell 120 points (1.6%) to 7,333. In moderately-heavy volume, 982 million shares were traded on the NYSE and 2.5 billion shares changed hands on the NASDAQ. WTI crude oil decreased $0.25 to $53.25 per barrel and wholesale gasoline was down $0.03 at $1.74 per gallon. Elsewhere, the Bloomberg gold spot price rose $19.96 to $1,325.41 per ounce, and the Dollar Index— a comparison of the U.S. dollar to six major world currencies—fell 0.6% to 97.19.
The final Market U.S. Manufacturing PMI Index was revised lower to 50.5 for May, versus expectations to be unrevised at 50.6, and below April’s 52.6 level. A reading above 50 denotes expansion. The release is independent and differs from ISM’s report, as it has less historic value and Markit weights its index components differently.
Construction spending was flat month-over-month (m/m) in April, versus projections of a 0.4% gain, and following March’s upwardly-revised 0.1% rise. Residential spending dropped 0.5% m/m and non-residential spending rose 0.3%.
Treasuries continued to rally, with the yield on the 2-year note falling 8 basis points (bps) to 1.84%, the yield on the 10-year note decreasing 5 bps to 2.08%, and the 30-year bond rate declining 3 bps to 2.54%. Stocks and bond yields have come under heavy pressure as of late, amid escalated trade tensions and some mixed global economic data, which have fostered an inversion of a key portion of the Treasury yield curve to resuscitate recession concerns.
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