Midday Report: Bank of America Backs Staples; Stocks Are Cautious

Stocks struggled for direction as the possibility of a rate hike in June continued to loom large over Wall Street. Boston Fed President Eric Rosengren noted that the U.S. economy is on the verge of warranting a rate increase next month. The U.S. manufacturing sector failed to improve in May as the Markit Flash PMI fell. The production component declined for the first time since September 2009. The sector has been under pressure from weaker global demand and a stronger U.S. dollar that deterred foreign buyers. Bank of America gave a two-notch upgrade to Staples (SPLS) . The firm said the move was a valuation call as the stock has fallen sharply following the dissolution of its planned merger with Office Depot (ODP) - Get Report .