US Stocks Look For Direction, Ends Flat
4:13 pm Tuesday, June 01st, 2021
U.S. stocks closed almost flat as fresh data showed that U.S. manufacturing activity while expanding, continues to be affected by rising commodities prices, materials shortages and difficulties in the labor market.
The cyclical bias has been supported by better-than-expected Manufacturing PMIs for May out of the U.S. and Europe, the OECD boosting its global growth forecasts for 2021 and 2022, OPEC+ talking about strong oil demand, and reports of bustling activity in airports and movie theaters over the weekend.
In addition, Boeing (BA) was upgraded to Outperform from Market Perform at Cowen, and Devon Energy (DVN) was upgraded to Strong Buy from Outperform at Raymond James.
On the downside, the defensive-oriented information technology (-0.2%), health care (-1.5%), utilities (-0.5%), and consumer staples (-0.3%) sectors are trading lower. The health care sector is the only sector down more than 1.0%, though.
The latter has been weighed down by weakness in Abbott Labs (ABT), which was down 9.30% after lowering its FY21 guidance due to a rapid decline in COVID-19 testing demand. Tech stocks have been clipped by the uptick in long-term interest rates.
Separately, AMC Entertainment (AMC) was up another 22% after raising cash by selling shares to Mudrick Capital Management.
The ISM Manufacturing Index for May moved up to 61.2% (Briefing.com consensus 61.0%) from 60.7% in April. A number above 50.0% connotes an expansion in manufacturing activity. May marked the twelfth straight month of expansion.
U.S. Treasuries began the holiday-shortened week on a lower note, though intraday action featured a rebound off opening lows. Treasuries started the trading day with losses across the curve after the overnight session saw the release of a heavy batch of economic data in Asia and Europe. The reports pointed to continued improvement among major economies, as Japan’s Manufacturing PMI expanded for the fourth month in a row while eurozone’s Manufacturing PMI remained in expansionary territory for the eleventh month in a row.
