Stocks soar on strong manufacturing data
US factory output expanded in September, bucking the contraction pattern seen in China, Japan and the eurozone. 3M will buy Ceradyne for $860 million.
Stocks surged Monday after a surprising manufacturing report showed that activity climbed in September. Monday's rally comes after a turbulent previous week that ended a positive quarter.
The Dow Jones Industrial Average ($INDU) was up 147 points at 13,584. The S&P 500 ($INX) was up 12 points at 1,452. The Nasdaq Composite ($COMPX) was up 9 points at 3,126.
U.S. Institute for Supply Management's September manufacturing index climbed from 49.6 in August to 51.5 in September, rising above 50 -- signalling expansion rather than contraction. Economists expected a reading of 49.7, according to Briefing.com. It's the first time since May that U.S. manufacturing expands.
Another manufacturing index, the final Markit U.S. Manufacturing Purchasing Managers Index, fell from 51.5 in August to 51.1 in September -- the lowest in three years -- as foreign demand for U.S. goods fell sharply. A level above 50 indicates expansion.
Construction spending in August fell 0.6% after falling 0.9% in July.
Much of the attention last week focused on Spain, as many observers expect the country to ask for international aid soon. The country last week detailed its 2013 budget plan and reported the results of its banks' stress test, both of which didn't cause markets too much alarm. Spain remains in focus after Moody's Investors Service said the upcoming recapitalization of Spanish banks is credit positive but ultimately may be "insufficient."
Greece's government, too, will unveil its budget later on Monday. It will likely contain tough austerity measures as the country is poised to enter its sixth year of recession.
Europe still struggling
In the eurozone, the number of jobless people climbed to a record high rate of 18.196 in August as the area's economy continued to struggle. The jobless rate in August remained unchanged at 11.4% of the workforce. With the economy struggling, the rate is likely to increase further.
Indeed, the final reading of the purchasing managers index, or PMI, for the eurozone manufacturing ticked higher from 45.1 to 46.1 but remained below 50 -- a level that's signalling contraction in activity -- for the 14th consecutive month.
Still, European stocks moved higher to rebound from last week's losses, which were driven mostly by Spain's woes, and despite weak data out of China.
Labor market in focus
While focus last week was on Spain, and Monday investors are paying attention to factory data, it's the labor markets that all eyes will turn to this week. Figures from ADP about private-sector jobs and weekly initial jobless claims will set the stage for Friday's monthly nonfarm payroll report from the Labor Department.
Stocks to watch
3M Co. (MMM) has agreed to acquire Ceradyne (CRDN) for $35 a share, which is a 43% premium over the its Friday close. The transaction has an aggregate value of about $860 million, or $670 million net of cash, cash equivalents, short-term investments and debt acquired, 3M said. Excluding one-time costs, the transaction will add about a penny a share to 3M's earnings in the first 12 months after the deal closes, the company said.
Nokia (NOK) and Oracle (ORCL) are expected to announce a deal that will give Oracle's customers access to Nokia's mapping service.
Apple (AAPL) shares advanced, shaking some of last week's losses on the heels of initial iPhone 5 sales that disappointed some analysts. On Friday, CEO Tim Cook apologized for the flawed mapping software.
The U.S. Defense Department on Friday awarded United Launch Alliance, which is a 50-50 joint venture of Lockheed Martin (LMT) and Boeing (BA), a $1.17 billion contract to provide satellite launches using its Delta IV and Atlas V rockets.
Monster Worldwide (MWW) advanced after DealReporter said the company may receive a takeover bid.
Airline stocks such as United Continental (UAL), Delta (DAL) and US Airways (LCC) may be active, as European airlines gained after the International Air Transport Association increased its 2012 profit forecast for the industry.
Honeywell International (HON) said Monday it'll pay $525 million in cash to buy a 70% stake in Thomas Russell Co., a privately held maker of technology and equipment for natural gas processing and treating.
Under George W. Bush and his fellow "deficit hawks," the wealthiest people in this country were given huge tax breaks which cost $1 trillion over a 10-year period. There was no offset for those tax breaks. They were simply added to the deficit.
Under George W. Bush and his fellow "deficit hawks," an overly-expensive Medicare prescription drug program written by the insurance and drug companies was signed into law. This program, which explicitly prevented the government from negotiating lower drug prices with the pharmaceutical industry, was not paid for and will end up adding some $400 billion to our national debt over a 10-year period.
Now, having run up huge deficits, our born-again "deficit hawks," on behalf of their billionaire allies, want to cut Social Security to save money."
- Sen. Bernie Sanders Sept. 5, 2012
It's good to be back from the islands but I see that nothing has changed here, execpt; maybe it's me, but is emwolb a little nicer this year ? I guess things do change a little. And I'm disappointed that I didn't make one of Re-togs list last week. Oh well !
As far as the 'free money' out there ? Yea, I'll be riding those 'waves' and capitalizing on them as much as possible. and when they fall, I'll be shorting to pull in those profits. (No - I don't need them to pay for the vacation-last weeks stock shorts took care of that nicely.)
Thursday should be good for a laugh on this thread after the debates. Romney is going to make BHO look very foolish Wednesday night- but I know that won't sway some of you libs- 37 MORE DAY'S TILL WE HAVE A NEW PRESIDENT- THANK THE LORD!!
More great news for our great President.The Pres has another term,now we just have to
settle the congressional races.Then settle to tax problem before Jan.1st.Everybodys
plan is for me to pay none and everybody else to pay plenty.Johnny Carson had the plan.
He said don`t tax people on income.Tax people on how much sex they have.That way people
would brag about how much they pay and everybody would pay because they would be
embarrested to say they didn`t have sex.
roll back the clock and WHEN did we actually have some decent presidential choices? perhaps clinton vs dole?
>>>>> We have two very bad choices to vote for this year. Neither is for the country, both are for themselves. <<<<<
Wall street speculators always come up with some BS to make the stocks jump. Its a jOKE!!!!
Think about it if you were selling something and your bonus depended on if you could sell it ,you would get something as a sales gimmick.
After reading some of the comments here:
I think the point everyone is missing is that the government and all the politicians could care less about the country and the voters. All they care about is themselves and getting re-elected, so they can continue to rake in the money. Romney said it with his 47% speech and he meant it. The only honesty I ever heard coming from a politician and I still think he's a looser. I don't like Obama either. We have two very bad choices to vote for this year. Neither is for the country, both are for themselves.
What is it going to take to wake up the parties and the politicians? Should we all write in another candidate so neither of these two get elected? What we need to do is something that will shake up both parties and let them know," We're tired and not going to take it anymore."
I quess the Wall Street bankers know that Bernanke is going to double down on QE5 and announce today that starting today the Federal Reserve will be buying not $40 billion not $80 billion but $250 billion mortgages a month to make the banks healthy once again.
Surprised the Dow is not up 800 points today.
And that those short term US T-bills that are all coming due in three months all $5 trillion dollars worth that nobody is rolling over as they figure the US is done for now. Well Bernanke is going buy all of those also.
Yep it's going to busy down at the Federal Reserve in the coming months.
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All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
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