Banks Rally; Naz Nears 4000
A double-dose of weaker-than-expected economic numbers helped drive stocks
higher Monday in a holiday-shortened session that saw strength in banks,
semiconductors, and cyclicals. By the close, the Nasdaq had gained 0.6% while the Dow and S&P 500 added about 1.0% each.
The May National Association of Purchasing Managers Index came in at 51.8,
which was lower than the 53.2 that analysts expected. Likewise, construction
spending for May showed a 0.1% increase compared to the 0.2% increase analysts
expected. Both figures add to the mounting evidence of a cooling economy.
Volume on the Nasdaq was 593 million shares, while NYSE volume was 448
million shares.
According to preliminary numbers, the Dow gained 112.78 to 10,560.64, the
Nasdaq added 25.08 to 3991.19, and the S&P tacked-on 14.63 to 1469.64.
Top sectors included banking
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up 3.5%, and chemicals
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Few sectors were in the red, but those that did lose about 0.5% included
software
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The weaker-than-expected economic numbers jazzed up the banking group with
the suggestion that further rate hikes might not be necessary. Respectable gains
in the bank index were posted by JP Morgan
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up 5%, First Union
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up 7%, and Bank One
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In the tech arena, standouts with large percentage gains were Digital Island
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7%, JDS Uniphase
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Mexican stocks surged following the defeat of the 71-year old ruling party
PRI in Mexican elections. Leading the Mexican index were Telefonos De Mexico
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up 5 11/16 to 62 7/8, Grupo Televisa
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Economico
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Among Dow stocks, the winners in addition to JP Morgan were Caterpillar
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up 6.2%, SBC
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[|C], up 3.6%, du Pont
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Looking ahead, the May index of leading economic indicators is due out Wednesday 10:00 AM
ET, and analysts look for a 0.1% decrease.