Stock Gains Accelerate Tuesday After Non-Manufacturing Data Beats Estimates

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Stock gains accelerated midday Tuesday after the Institute for Supply Chain Management's non-manufacturing index showed a reading beat that bear economist’s estimates. 

All three major U.S. indices rose considerably Tuesday, with the S&P 500 up as much as 1.94%, above its morning gains of 1.3%. The 10 year treasury yield rose to 0.66% as investors feel optimistic about consumer spend as several states across the country ease lockdowns. Gold fell 0.44%, another risk-on signal. 

The ISM non-manufacturing index showed a reading of 41.8 for the month of April, against estimates of 40. Anything below 50 represents a decline year-over-year. March’s reading was 52. 

The better-than-expected reading, which encapsulates services that support goods markets — construction, retail services and other industries — is consistent with the theme of late that the consumer may be faring better than initially feared. 

Consumer spend is declining severely for April, but several companies have reported on their first quarter earnings that the sales decline for the end of March and April are less severe and moving back in the direction of growth. Some strategists attribute this to the heavy monetary and fiscal stimulus the economy has seen.

Not surprisingly, oil continued its tear from historic lows, up more than 90% since April 28 and up 20% to $24.5 a barrel Tuesday. Oil represents a chunk of employment in the country and many small oil companies are hoping higher prices can enable them to stave off bankruptcy.

The heavy hitters led the Dow Jones and the U.S market, with Exxon Mobil  (XOM) - Get Report, Chevron  (CVX) - Get Report and BP Oil up 3%, 3.61% and 3.87%, respectively. 

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