Updated from 12:31 p.m. EDT
After floundering early, stocks finished higher in a light, pre-Independence Day shortened session.
The gains came in the wake of a softer-than-expected economic report. The
National Association of Purchasing Management's
Purchasing Managers' Index
came in cooler than expected at 51.8, its lowest level since January 1999. Economists polled by
had expected it to come in at 54.
The report bolstered the argument that the
Fed is done, or nearly done, with raising rates. Stocks steadily rose after the 10 a.m. EDT release.
Even then, it was by no means a moonshot.
"I am a little bit curious that the market is not doing better based on the way these NAPM numbers came in," said Jim Volk, co-director of institutional trading at
in Portland, Ore.
Volk posited that a bit of give-back on some late moves a lot of stocks saw on Friday sapped some of the market's strength. "A lot of these things had big spurts," he said. "You probably had guys trying to mark them up for the end of the quarter and then they came back down." Such moves are fairly synthetic, and now that the managers are toasting their ill-gotten gains in Lottabunkport, the stock is drifting down.
There were other oddities going on Friday -- the annual rebalancing of the
indices, the semiannual changes in the
indices and a big addition --
-- to the
S&P 500. These also created artificial moves.
Whether it was due to changes in the Barra indexes or fund-manager markups,
is a good example of how such moves get reversed. Off 3.7%, it led the downside on the
Dow Jones Industrial Average. UTX tacked on 7.6% Friday, with most of the gain coming from a surge that began around 2:30 p.m. EDT.
It's possible that there will be a holdover effect from that swell NAPM report. There weren't many investors in the market today -- volume was at its lowest level since New Year's Eve. When people get back to work Wednesday, they may like what they see.
"We have a general consensus that the economy is starting to moderate," said Steve Goldman, market strategist at
in Greenwich, Conn.
Moreover, Goldman reckons that the bulk of the second-quarter earnings warnings are behind us. "Stocks are coming out of the period of prereleases and into the period of actual releases," he noted. And because the actual releases generally surprise to the upside (companies having learned to guide Wall Street to estimates they can easily clear), stocks may be set to move higher.
"Things are generally positive. We could wind up being higher for the next few months here," concluded Goldman. "But we can't go too fast, too quick, or the
The Dow finished the day up 112.78, or 1.1%, to 10,560.67.
The S&P 500 ended up 14.72, or 1%, to 1469.32. In a perfect illustration of the kind of year the big-cap S&P is having, the index is up just 0.07 for the year. That's not a percentage move -- it's 7 hundredths of a point.
Nasdaq Composite Index today gained 25.28, or 0.6%, to 3991.39.
Russell 2000 tacked on 6.81, or 1.3%, to 524.04 and
TheStreet.com Internet Sector
index added 5.18, or 0.6%, to 847.02.
Breadth was positive, especially on the Big Board, on light volume.
New York Stock Exchange: 1,971 advancers, 803 decliners, 448.84 million shares. 44 new 52-week highs, 19 new lows.
Nasdaq Stock Market: 1,981 advancers, 1,762 decliners, 588.21 million shares. 54 new highs, 38 new lows.
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Mexican companies whose stocks trade in the U.S. were rallying on the election Sunday of
Vicente Fox Quesada
. In beating incumbent President
, Fox ended 71 years of
Institutional Revolutionary Party
In the past, Mexico's presidential elections, which come every six years, have sent investors running for cover. The last poll, in 1994, heralded a mismanaged devaluing of the peso, rampant inflation and a gut-wrenching devaluation.
But whereas past polls have been characterized by scandal and violence, this one was, according to election monitor
, "almost perfect." Carter told
, "This was an extraordinary demonstration that the Mexican people were mature and committed to democracy."
Lofty stuff, yes, but investors
democracy. It smacks of fairness, of freer markets, of all those things that we're going to be celebrating tomorrow. It also smacks of higher stock prices.
Telefonos de Mexico
American depository receipts finished up 10% on heavy volume.
Fomento Economico Mexicano
, the brewer and soft-drink company better known as Femsa, was up 6.8%.
was up 7.6%. And
was up 7.2%.
Stateside, financial stocks were rebounding from a poor performance on Friday. The
Philadelphia Stock Exchange/KBW Bank Index
was up 4%. Top performers included
, up 5.11%, and
, up 2.9%.
Telecom equipment stocks were also doing well. Headliners were
, which finished up 5.4%, and
, up 3.2%.
Chip stocks moved steadily higher through the day, finishing out with some impressive gains. The
Philadelphia Stock Exchange Semiconductor Index
tacked on 3.5%.
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Treasuries moved off their lows after the weaker-than-expected Purchasing Managers' Index, which sank to its lowest level since January 1999. Volume, however, was paltry, trailing the average for a Monday over the last month by more than 25% through 10 a.m. EDT.
The benchmark 10-year Treasury note, down as much as 11/32 earlier, finished up 8/32 at 103 21/32, its yield at 5.99%.
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European bourses did well today.
finished up 157.7, or 2.5%, to 6470.4.
Europe's other major stock markets were also higher. Frankfurt's
was up 51.01, or 0.7%, to 6949.22 in late trading. The
in Paris finished up 61.93, or 1%, to 6508.47.
The euro was trading down at $0.9490.
Asian markets were mixed overnight.
Telecom stocks in Japan rose in light trading Monday, on hopes of a settlement between the Washington and Tokyo over interconnection rates and optimism over the
Bank of Japan's tankan
survey of corporate sentiment. The
index gained 203.61 points, or 1.2%, to 17,614.66.
Currency dealers were more hesitant, and the dollar greenback edged slightly higher to fetch 106.30 yen in Tokyo trading. The dollar was recently lower at 105.95 yen.
index dropped 30.81 points to 16,124.97, with profit-taking hitting index heavyweight
, formerly known as China Telecom.
Mexico's stock market was rallying on the first opposition victory in seven decades and optimism about a peaceful transition.
Since 1976, Mexico's economy has stumbled into recession every time the presidential office switched hands. With the country's economy at its strongest in years, economists and analysts are expecting Mexico to sail through the changeover this time around.
index soared 381.85, or 5.5%, to 7330.18.
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