US stock prices moved higher on Monday, driven up by a stronger than expected ISM Manufacturing report. U.S. construction spending dropped a smaller than expected 2.9% in April. Most sectors in the S&P 500 index were higher, driven up by real-estate and energy, healthcare bucked the trend. Retail names like Coty and Gap led the S&P 500 index higher. The VIX volatility index moved higher despite a rally in stocks. This shows that options traders are still concerned about a correction. After the closing bell both Zoom and Crowdstrike released financial results.
US Manufacturing Unexpectedly Rose
The Institute of Supply Management reported on Monday that US manufacturing activity rose from an 11-year low in May, the strongest sign yet that the worst of the economic downturn could be in the rear-view mirror. According to ISM the national factory activity rose to a reading of 43.1 last month from 41.5 in April, which was the lowest level since April 2009. Expectations had been for the index to climb to 43.0 in May.
The ISM’s new orders sub-index increased to a reading of 31.8 in May from 27.1 in April, which was the lowest since December 2008. The survey’s measure of order backlogs at factories rose to 38.2 last month after plummeting to a reading of 37.8 in April. There was also an uptick in the ISM’s measure of factory employment, which advanced to a reading of 32.1 in May after plunging to 27.5 in the prior month, which was the lowest since February 1949.
US Construction Spending Dropped
US construction spending dropped a smaller than expected 2.9% in April, according to the Commerce Department. Expectations had forecast a 6.8% plunge due to the coronavirus pandemic. Residential construction sank 4.5% in April, but spending on construction projects outside the housing sector fell a much smaller 1.8%.
This article was originally posted on FX Empire