Stocks dip after manufacturing growth slows

Story Topics
Question of the Day

Should Congress make English the official language of the U.S.?

View results

NEW YORK (AP) — Stocks edged lower on Wall Street on Monday after an industry group reported that U.S. manufacturing growth cooled in March and was weaker than economists had forecast.

The Dow Jones industrial average was down 29 points, or 0.2 percent, at 14,549 as of 2:38 p.m. EDT. The Standard & Poor’s 500 index dropped eight points, or 0.5 percent, to 1,561. The Nasdaq composite fell 28 points, or 0.9 percent, to 3,240.


SEE ALSO: Survey: U.S. manufacturing grew more slowly in March


U.S. manufacturing kept growing for a fourth straight month in March, but at a slower rate, according to the Institute for Supply Management. The ISM’s manufacturing index dropped to 51.3 from 54.2 in February. Economists polled by the data provider FactSet had expected the index to come in at 54.

The S&P 500 ended the first quarter last week by closing at an all-time high of 1,569.19, surpassing its previous record close of 1,565.15 on Oct. 9, 2007. The index has recaptured all of its losses from the financial crisis and the Great Recession and has gained 9.4 percent since the start of the year. The Dow is 11 percent higher.

As stocks have climbed this year, so have investor expectations for economic reports, said JJ Kinahan, chief derivatives strategist at TD Ameritrade.

“The numbers have to be outstanding in order to drive the market higher,” Mr. Kinahan said. “It’s a different mindset when we’re at these levels.”

Industrial companies fell the most in the S&P 500, 1 percent. 3M — which makes Post-it notes, industrial products and construction materials — fell 76 cents to $105.55. Caterpillar, a maker of construction and mining equipment, dropped $1.36 to $85.59.

This market has been driven higher this year by optimism that housing is recovering and employers are starting to hire again. Strong company earnings and continuing stimulus from the Federal Reserve also have increased demand for stocks.

EBay rose $1.51 to $55.73. The company said late Friday that it expects revenue and profit to keep heading higher in the coming years as its e-commerce business and fast-growing PayPal payments service continue to expand.

Brewer Molson Coors, which counts Coors and Miller Lite among its beers, rose $2.64 to $51.57 after Goldman Sachs upgraded its rating on the stock to “Buy” from “Neutral,” citing a better outlook for beer sales as the economy improves.

April is historically the second-strongest month for stocks, Deutsche Bank analysts said in report released Monday. The S&P 500 has gained an average of 1.4 percent in April, based on returns since 1960, making it the second-strongest month after December.

The last meaningful setback for stocks started before November’s election. The market slid 6 percent between Oct. 1 and Nov. 15 in the run-up to the vote and immediately afterward on concerns that Washington would be unable to enact reforms to keep the economy growing.

Evidence that growth is continuing, despite the political tensions in Washington, have kept stocks on an upward trajectory since then, leaving investors waiting for dips to add to their holdings.

“I’d love to have some sort of a pullback here because I’d think it’s an opportunity,” said Scott Wren, an equity strategist at Wells Fargo Advisors. “But it doesn’t feel like we’re going to have one in the near term.”

The yield on the 10-year Treasury note, which moves inversely to its price, fell to 1.84 percent from 1.85 percent.

U.S. markets were closed in observance of Good Friday last week. European markets were closed for the Easter Monday holiday.

Among other stocks making big moves;

• Tesla Motors jumped $6.06 to $43.99 after the electric-car company said sales are running ahead of schedule. The Palo Alto, Calif., company said Sunday night that first-quarter sales have exceeded 4,750 Model S sedans, above its previous forecast of 4,500.

• DFC Global, a finance company that provides loans to consumers without bank accounts, fell $3.30 to $13.56 after slashing its earnings estimate for its fiscal year because of increasing loan defaults in its business in Britain.

• American Greetings rose $1.97 to $18.07 after the company agreed to be taken private for about $602 million by a group led by some of its top executives.

 

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments
blog comments powered by Disqus
TWT Video Picks