Markets & Finance

Blue Chips Finish Higher, Techs Slip


Blue chips moved past a profit warning from diversified manufacturer Minnesota Mining & Manufacturing Co. (MMM) to finish solidly higher Monday, after new data pointed to an economic recovery. Tech stocks, meanwhile, ended slightly lower.

Among the economic highlights, the National Association of Purchasing Management's monthly manufacturing index rose to 44.7 in June -- its highest reading this year -- from 42.1 in May, compared with a decade low of 41.2 hit in January. But overall, the manufacturing sector still is in a slump, with the index still below 50 since July, which could mean another interest rate cut, according to some market observers.

David Sowerby, market strategist for Loomis Sayles & Co., told Standard & Poor's the NAPM report has supported stocks this trading session as "one more piece of information that the Federal Reserve is not done yet."

In corporate news, the Dow component 3M said it expects lower second-quarter earnings due to a weak U.S. economy, an increasing slowdown in Europe and Asia, and continuing negative impacts from the strong U.S. dollar. Shares of 3M reversed course to finish up more than 2%.

Down earlier in the session, the Dow Jones Industrial Average rebounded to close up 91.25 points, or 0.87%, to 10,593.65. The Nasdaq Composite shed 11.81 points, or 0.55%, to 2,148.73. The Nasdaq fixed computer glitches that forced a trading outage on Friday. But traders on Monday were still trying to correct stocks, whose closing prices were reported incorrectly last week.

Meanwhile, the broader S&P 500 index added 12.30 points, or 1%, to 1,236.72. Trading was expected to be light all week because of the July 4 holiday on Wednesday. On Tuesday, the markets will close early at 1 p.m. EST in advance of the July 4 holiday.

Treasury Market

U.S. Treasuries ended higher. In addition to the manufacturing report, construction spending rose 0.3% in May, its second consecutive monthly gain, to a record seasonally adjusted annual rate of $881.6 billion from a revised $879.2 billion in April, the Commerce Department said. The May rate was 8.3% higher than a year ago. The Commerce Department also reported consumer spending rose by 0.5% in May to a $7.087 trillion annual rate, boosted by a 1.2% gain in expenditures for durable goods. Income growth, however, was slower, increasing by 0.2% to an $8.632 trillion rate.

World Markets

European markets ended higher. In London, the Financial Times-Stock Exchange 100 index gained 74.20 points, or 1.32%, to 5,716.70. In Germany, the DAX Index added 55.69 points, or 0.92%, to 6,114.07. In France, the CAC 40 was up 71.18 points, or 1.36%, to 5,296.51.

In Asia, markets finished lower. The Nikkei plunged 217.87 points, or 1.68%, to 12,751.18, amid disappointing results from the June Tankan business survey. In Hong Kong, the market was closed for a holiday on Monday. On Friday, the index surged 214.71 points, or 1.67%, to 13,042.53. By Heesun Wee in New York


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