Stocks mostly higher following Intel deal for chip designer
NEW YORK (AP) — U.S. stocks inched mostly higher in morning trading Monday following a rise in a key manufacturing index and news of a big acquisition in the semiconductor industry. Six of 10 industry sectors of the Standard and Poor’s 500 index were higher, led by health care companies.
KEEPING SCORE: The Dow Jones industrial average rose 25 points, or 0.1 percent, to 18,035 as of 11:26 a.m. Eastern time. The S&P 500 climbed two points, or 0.1 percent, to 2,109. The Nasdaq composite inched up seven points, or 0.1 percent, to 5,076.
CHIP DEAL: Altera jumped $2.96 to $51 after the chip designer agreed to be acquired by Intel for $17 billion in cash. The 6 percent gain in Altera stock was the biggest in the S&P 500. Intel fell 48 cents to $33.98, a loss or 1.4 percent, the biggest loss in the Dow.
EYES ON THE ECONOMY: U.S. manufacturing growth accelerated in May for the first time in six months, propelled by more new orders and an increase in hiring.
The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index rose to 52.8 last month, the highest reading since February. The pickup in factory activity suggests the economy is improving modestly after a sluggish start to the year.
Investors are awaiting several economic reports this week, culminating Friday with the jobs report for May. Investors are hoping to see signs that first quarter economic slump was an “aberration,” said Chris Beauchamp, senior market analyst at IG.
EUROPE HIGHER: Germany’s DAX rose 0.3 percent while the CAC-40 in France gained 0.4 percent. Britain’s FTSE 100 fell 0.4 percent.
GREECE UNCERTAINTY: Tensions remain high in Europe as Greece inches closer to a Friday deadline to make a debt payment to the International Monetary Fund. Greece is struggling to convince the IMF and creditors in Europe that it has a reform strategy in place so it can get access to more bailout cash.
One suggestion is that Greece could roll all its IMF payments due this month into one, giving it more time to secure a deal to get the 7.2 billion euros ($7.9 billion) remaining in its bailout fund.
ANALYST TAKE: “Concerns about Greece continue to hold investors back from taking on too much risk,” said Fawad Razaqzada, an analyst at Forex.com. “With the lack of progress on the issue the pressure is now growing.”
CHINA SLOWDOWN: Two surveys Monday showed China’s manufacturing industry, which employs millions of people, remained weak last month. That has added pressure on Beijing to roll out more measures to keep growth of the world’s second-largest economy on target. The China Federation of Logistics and Purchasing’s manufacturing index showed activity stagnating. HSBC’s manufacturing index showed manufacturing contracted for a third straight month.
ASIA’S DAY: The Shanghai Composite jumped 4.7 percent. Hong Kong’s Hang Seng gained 0.6 percent. Japan’s Nikkei 225 ended flat while South Korea’s Kospi sank 0.6 percent.
ENERGY: U.S. benchmark crude oil fell 82 cents to $59.48 a barrel in New York.
CURRENCIES: Trading in foreign exchange markets was subdued. The euro was little changed at $1.0908 and the dollar rose slightly to 124.62 Japanese yen.
BONDS: Bond prices fell slightly. The yield on the 10-year Treasury note rose to 2.16 percent from 2.12 percent late Friday.
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