By Wallace Witkowski, MarketWatch , Ryan Vlastelica
Equity trading has been marked by lighter-than-usual volume
U.S. stocks closed higher Monday for a third session of gains,
recovering most of last week's sharp loss as tech and industrial
stocks rallied in a day marked by lighter than usual volume.
The Dow Jones Industrial Average finished up 89.99 points, or
0.4%, to 20,894.83, led higher by more than 1% gains in Boeing
Co.(BA), 3M Co.(MMM), UnitedHealth Group Inc.(UNH), Cisco Systems
Inc.(CSCO) and Microsoft Corp.(MSFT)
The S&P 500 index rose 12.29 points, or 0.5%, to close at
2,394.02, and swung back into positive territory for the month of
May. The day's gains were broad-based, with 10 of the 11 primary
S&P 500 sectors rising on the day. The industrials sector rose
0.7% as defense stocks advanced on an arms deal with Saudi Arabia,
outstripped only by utilities, up 0.9%, and tech, up 1%.
The Nasdaq Composite Index rose 49.91 points, or 0.8%, to finish
at 6,133.62.
With the bulk of earnings season over, investors will scrutinize
U.S. political news, like headlines last week that triggered a
sharp midweek plunge for stocks
(http://www.marketwatch.com/story/us-stock-futures-slide-as-concerns-over-trump-grow-2017-05-17).
President Donald Trump traveled to the Middle East
(http://www.marketwatch.com/story/trump-urges-muslims-to-fight-crisis-of-extremism-in-saudi-speech-2017-05-21)
this weekend and delivered a speech with Israeli Prime Minister
Benjamin Netanyahu on Monday.
Read:In the battle for control of the stock market, bulls may
have an edge
(http://www.marketwatch.com/story/stock-market-set-for-showdown-between-bulls-and-bears-2017-05-20)
Last week's dip was driven by midweek reports that Trump asked
then-Federal Bureau of Investigation Director James Comey to stop
an investigation
(http://www.marketwatch.com/story/trump-denies-asking-comey-to-drop-flynn-investigation-2017-05-18)
into Russian meddling
(http://www.marketwatch.com/story/white-house-official-probed-over-russia-and-president-called-comey-nut-job-reports-say-2017-05-19)
into the U.S. election. Those reports have helped to sow doubt that
Trump will be able to push through a pro-growth agenda seen as
driving the economy and stocks into higher gear.
It didn't take much to push around stocks Monday with volumes
being extremely low, said Sahak Manuelian, managing director of
equity trading, in an interview.
"Volumes are terrible across the board," Manuelian said. "I
think there's just a lack of market participation within this
rally."
By the close, composite volume on the New York Stock Exchange
was at 3.14 billion shares, and about 1.71 billion shares on the
Nasdaq. Average daily trading volume for year to date has been 3.53
billion shares on the NYSE, and 1.86 billion shares on the Nasdaq,
according to Dow Jones data.
Investors will this week try to whether that selloff was
temporary or a "signal of something more sinister," said Michael
Stanes, investment director at Heartwood Investment Management, in
a note Monday.
Read:This chart shows how stocks aren't breaking down--but not
breaking out, either
(http://www.marketwatch.com/story/this-chart-shows-how-stocks-arent-breaking-down-but-not-breaking-out-either-2017-05-22)
He argued, though, that gains for stocks after the presidential
election are also due to improved global economic conditions and
fading disinflationary effects that started in summer 2016. The
fundamental backdrop hasn't changed, with the U.S. economy still on
a solid footing and other global economies steady, said Stanes.
"We recognize that we are in the latter part of the market cycle
and sentiment is likely to remain vulnerable to pressure points as
we move through the year," he said.
Read:White House to roll out budget proposal, cutting Medicaid,
assistance to the poor
(http://www.marketwatch.com/story/white-house-to-roll-out-budget-proposal-cutting-medicaid-assistance-to-the-poor-2017-05-22)
Fed speakers ahead: On a quiet day for data, the Chicago
national activity index was at a three-year high
(http://www.marketwatch.com/story/chicago-feds-national-economic-measure-at-multimonth-high-with-housing-its-only-drag-2017-05-22)
of 0.49 in April, compared with 0.07 in March.
Read:Buoyant U.S. economy rides out rough political sea, but
more storms ahead
(http://www.marketwatch.com/story/buoyant-us-economy-rides-out-rough-political-sea-but-more-storms-ahead-2017-05-21)
Two Fed speakers were lined up to speak after the market closes
on Monday. Fed Gov. Lael Brainard is slated to discuss "the roles
of opportunity and inclusion in strengthening the U.S. economy" in
Minneapolis at 7:30 p.m. Eastern. Then Chicago Fed President
Charles Evans gives a speech on the economy at an OTC derivatives
conference in Shanghai, China, at 9:10 p.m. Eastern.
Stock movers: Blackstone Group LP(BX) shares closed up 6.7%
after Saudi Arabia's Public Investment Fund pledged $20 billion
(http://www.marketwatch.com/story/saudi-arabias-20-billion-wager-with-blackstone-is-record-sized-bet-on-us-infrastructure-2017-05-21)to
the firm's new infrastructure fund.
Shares of Huntsman Corp.(HUN) fell 2.1%, reversing an earlier
advance that came on news it will merge with Switzerland's Clariant
AG (CLN.EB), creating a chemicals giant valued at $14 billion.
Under terms of the deal announced Monday
(http://www.marketwatch.com/story/huntsman-clariant-to-combine-into-20-bln-company-2017-05-22),
Clariant shareholders will own 52% of the new entity and Huntsman
will own the rest.
Ford Motor Co.(F) shares finished up 2.1% on news the auto maker
plans to replace Chief Executive Officer Mark Fields with Jim
Hackett
(http://www.marketwatch.com/story/ford-to-replace-ceo-mark-fields-with-jim-hackett-amid-pressure-on-profit-2017-05-22),
a Ford executive who leads a unit working on autonomous cars.
Companies in the defense sector rose after Saudi Arabia and
other Gulf states signed arms deals worth $350 billion
(http://www.marketwatch.com/story/defense-stocks-rise-across-the-board-premarket-after-trump-signs-350-billion-of-arms-deals-2017-05-22)
with the U.S. over the weekend. Lockheed Martin Corp. (LMT) rose
1.6% while Raytheon Corp. (RTN) added 0.6%. The iShares U.S.
Aerospace & Defense ETF(ITA) rose 0.9%.
Advanced Micro Devices Inc.(AMD) shares fell 3.3% on heavy
volume after speculation of a licensing deal
(http://www.marketwatch.com/story/amds-stock-slumps-after-ceo-pooh-poohed-speculation-of-intel-license-deal-2017-05-22)
with Intel Corp. (INTC) faded.
Other markets: Asian stocks were largely higher, outside of a
0.4% dip for the Shanghai . In Europe, stocks finished lower with
the Stoxx Europe 600 index down 0.1%.
Read:Miners, oil share lead the FTSE 100 higher
(http://www.marketwatch.com/story/miners-oil-shares-lead-the-ftse-100-higher-2017-05-22)
(http://www.marketwatch.com/story/miners-oil-shares-lead-the-ftse-100-higher-2017-05-22)The
dollar was flat, and lower against the euro after German Chancellor
Angela Merkel reportedly said because of European Central Bank
policies, the weaker euro has made German products cheaper
(http://www.marketwatch.com/story/pound-declines-after-shift-in-uk-election-polls-euro-climbs-2017-05-22).
Read: This is the 'bad' kind of dollar weakness
(http://www.marketwatch.com/story/this-is-the-bad-kind-of-dollar-weakness-2017-05-22)
Gold prices settled up 0.6%
(http://www.marketwatch.com/story/gold-keeps-rally-going-as-dollar-eases-stocks-churn-2017-05-22)
at $1,246.40 an ounce, a three-week high
(http://www.marketwatch.com/story/gold-keeps-rally-going-as-dollar-eases-stocks-churn-2017-05-22).
West Texas Intermediate oil prices rose 0.8% to settle at $50.73 a
barrel
(http://www.marketwatch.com/story/oil-prices-climb-as-investors-wait-for-opec-meeting-2017-05-22)
on an expected production cut from the Organization of the
Petroleum Exporting Countries.
Read:4 potential outcomes for OPEC's crucial meeting
(http://www.marketwatch.com/story/4-potential-outcomes-for-opecs-crucial-meeting-2017-05-19)
--Barbara Kollmeyer in Madrid contributed to this article
(END) Dow Jones Newswires
May 22, 2017 16:36 ET (20:36 GMT)
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