MW: U.S. stocks rebound on manufacturing bright spots
By Laura Mandaro, MarketWatch
SAN FRANCISCO (MarketWatch) -- U.S. stocks rebounded from a weak end to the second quarter, supported Monday by improving manufacturing data in Europe and better business sentiment in Japan.
The Dow Jones Industrial Average DJIA +0.87% rose 91 points, or 0.6%, to 15,003. The S&P 500 SPX +0.94% gained 12 points, or 0.7%, to 1,618. The Nasdaq Composite COMP +1.21% added 33 points, or 1%, to 3,436.
The benchmark indexes ended the second quarter with more than 2% gains. But unease about how the economy and markets will perform once the Federal Reserve starts to slow its extraordinary stimulus measures, as early as this year, derailed the rally in June. Stocks fell more than 1% last month.
Volatility is likely to be high this week, with low trading volumes during the holiday-shortened trading week exaggerating any moves. U.S. markets are closed Thursday for the Independence Day holiday. The week is capped by Friday’s report on nonfarm payrolls for June.
“There’s absolutely the prospect for some rampant volatility, even if overall markets remain relatively unchanged,” said Mike McCudden, head of derivatives at Interactive Investor, in emailed comments.
The first major U.S. data release of the month comes at 10 a.m. Monday in a report from the Institute for Supply Management on June manufacturing activity. Economists polled by MarketWatch expect the index will reach 50.6% for June, from a prior 49%. Anything over 50% indicates expansion. Also due at the same time, construction spending for May is expected to rise 0.8% after a 0.4% gain the prior month.
U.S. stocks futures showed little reaction to the release of less-widely followed survey, the June U.S. flash manufacturing PMI from Markit. It fell to 51.9 in June from 52.3 in May.
Earlier releases of global manufacturing surveys showed strength in Europe and weakness in China.
In Europe, the latest purchasing managers’ index showing a rise to a 16-month high in June, according to Markit. PMIs rose in all nations except Germany, which showed a slight revision down from a prior reading. The Euro Stoxx 600 XX:SXXP +1.08% was up 0.6%.
Most Asia markets outside Japan fell after two separate manufacturing surveys showed a further loss of momentum in China. Other surveys showed weakened conditions in South Korea and Taiwan, both affected by the slowdown in China. The Shanghai Composite CN:SHCOMP +0.81% ended 0.8% higher after a choppy session, while Korean and Taiwan benchmarks fell.
But in Japan, stocks finished at their best level in more than a month as the U.S. dollar USDJPY +0.5280% rose above 99 yen after an upbeat reading on sentiment among Japanese businesses in the quarterly tankan survey. Japan’s Nikkei 225 JP:NIK +1.28% rose 1.3%.
Gold prices gained alongside oil prices.
Shares of Apple Inc. AAPL +2.46% rose 1.5% after news the company has filed a trademark application for “iWatch” in Japan, increasing speculation Apple may be gearing up to introduce a new watch-like device.
Separately, Raymond James raised its rating on Apple to strong buy from outperform, citing the stock’s valuation and its belief “that near-term financial trends will stabilize and then improve following the June quarter.”
Shares of BlackBerry BBRY -2.49% fell over 1.5% following several broker downgrades in the wake of disappointing results from the handset maker.
Laura Mandaro is MarketWatch's Markets editor, based in San Francisco. Follow her on Twitter @lauramandaro. Barbara Kollmeyer and Polya Lesova contributed to this report.
