U.S. market indexes were higher Monday following the global trend; however, weakening data and uncertainty around corporate earnings have investors bearish for the near term.
For the day the Dow Jones Industrial Average closed at 17,710.71 for a gain of 175.39 points or 1.00%. Gains in the Dow Jones Industrial Average were led by Apple (AAPL, Financial), DuPont (DD, Financial), Cisco (CSCO, Financial), Home Depot (HD, Financial) and Walmart (WMT, Financial). The Standard & Poor's 500 closed at 2,066.66 for a gain of 20.05 points or 0.98%. The Nasdaq Composite closed at 4,775.46 for a gain of 57.78 points or 1.22%.
Stocks managed to gain Monday despite a lower-than-expected report from the Empire State Manufacturing Index and disappointing data from China. The Empire State Manufacturing Index reported a decrease of 9.02 on Monday, far below consensus of 7.00. In China, industrial output data showed an increase of 6% year over year in April, missing estimates of 6.6% and falling below the previous month’s reading of 6.8%. Retail sales in China were also lower than estimates with a year-over-year increase of 10.1% in April, down from 10.5% in March.
The Housing Market Index, which was also reported on Monday, was basically flat as the housing market continues to help the economy broadly. The Housing Market Index, which tracks homebuilder optimism, was in line with expectations at 58 versus consensus of 59 and unchanged from the previous month.
Continually lower economic reports have been the trend as the economy appears to be weakening slightly. Key reports recently, combined with uncertainty around corporate earnings have investors mainly bearish in the current market environment and especially after the recent reports on GDP and employment data. The Bureau of Economic Analysis reported GDP growth of 0.5% for the first quarter and the most recent report from the Bureau of Labor Statistics had job increases falling far below consensus. April’s Employment Situation Report from the Bureau of Labor Statistics showed an increase of 164,000 jobs in April versus consensus of 200,000. The unemployment rate is also currently still at 5%. With these numbers stocks are volatile and investors are trading cautiously.
In a CNBC discussion Monday, market specialists gave their insights on trading activity and the current bear market environment.
