Stocks Hold at Highs in Low-Volume Start to July

Stocks hold onto highs on Friday in a quieter, low-volume session ahead of the Independence Day long weekend.
By Keris Alison Lahiff ,

Stocks held onto highs on Friday in a quieter, low-volume session ahead of the Independence Day long weekend.

The S&P 500 had traded just 143 million shares by late morning Friday, a fraction of the three-month daily average of 641 million shares.

The S&P 500 was up 0.44%, the Dow Jones Industrial Average rose 0.35%, and the Nasdaq added 0.74%. 

It will likely be a choppy and erratic session with low activity heading into the Independence Day long weekend.

"We're likely going to see some skeleton crews on Wall Street as many usually take long holiday weekends to enjoy the summer around holidays," said James Stanley, currency analyst at DailyFX. "This is relevant for traders because this could mean lower levels of liquidity."

Manufacturing activity in the U.S. continued to recover in June from a rough start to the year as the headwinds of a stronger U.S. dollar and weaker global demand began to ease. The ISM Manufacturing Index rose to 53.2 in June from 51.3. Analysts expected a reading of 51.5. 

A separate read on the manufacturing activity showed June levels at their best in three months. The Markit's U.S. PMI Manufacturing Index increased to 51.3 in June from 50.7. 

Construction spending fell in May, according to the Census Bureau. The measure declined 0.8%, a surprising reading that conflicted with estimates of a 0.6% increase. Residential spending was flat from April's reading, while nonresidential spending declined 1.3%.

It's been a wild week for stocks. Wall Street began the week in sharp decline after the shock of Friday's pro-Brexit vote, before snapping into recovery mode. Stocks recovered from the Brexit selloff on hopes of increased monetary stimulus from the world's central banks. Bank of England Governor Mark Carney fueled those hopes on Thursday when he noted that the central bank would likely need to implement further easing.

Stocks ended the month and second quarter on a confident note on Thursday, ending the session at the day's highs. For the entire three months from April to June, the S&P 500 posted gains of nearly 2%. A major quarterly rally in crude oil prices helped to boost equities. The commodity ended the quarter with gains of 26%, its best quarterly performance since 2009, thanks to disruptions to global oil production, particularly in Canada, Nigeria and Venezuela.

Car sales mainly came in strong last month. For June, Ford (F) - Get Report vehicle sales rose 6.4% thanks to strength in its truck segment, and Fiat Chrysler (FCAU) - Get Report reported a 6.5% increase in its auto sales over June on strong demand for its Jeep brand. General Motors (GM) - Get Report was the weak one of the bunch, reporting a 1.6% decline in U.S. sales in June. The drop was steeper than an expected 1.3% decline. 

Tesla Motors (TSLA) - Get Report  confirmed that regulators had begun a preliminary investigation into the fatal crash of a Model S vehicle in "autopilot" mode in Florida early May. The feature automatically changes lanes and independently reacts to changes in traffic conditions.

Micron Technology (MU) - Get Report slid 10% after a disappointing third quarter. The chipmaker reported a 25% decline in revenue to $2.9 billion, missing estimates of $2.96 billion. A net loss of 8 cents a share was a penny narrower than forecast. The company also announced an unspecified number of job cuts as part of a cost-cutting plan expected to save more than $300 million in fiscal 2017.

Chipotle (CMG) - Get Report was slightly lower after chief creative and development officer, Mark Crumpacker, was indicted for his role in a cocaine drug ring. Crumpacker has been charged with drug possession and criminal possession of a controlled substance. Eighteen buyers have been charged in the ring.

Netflix (NFLX) - Get Report rose 6% after Canaccord analysts initiated the stock with a buy rating and $120 price target. The firm said the video-streaming service has the potential to post sustained subscriber growth. 

Honeywell (HON) - Get Report confirmed plans to purchase distribution systems company Intelligrated for $1.5 billion. Intelligrated is currently owned by a company backed by Permira funds. Honeywell expects the acquisition to add roughly $900 million to 2016 sales. 

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