Stocks were trading higher near midday Monday, shrugging off a pair of weaker-than-expected economic reports. Trading is thin ahead of the holiday Tuesday, with energy, basic materials and select information-technology stocks leading the market higher, says Standard & Poor's Equity Research.
The Dow Jones industrial average rose 79.16 points, or 0.71%, to 11,229.38. The broader Standard & Poor's 500 index advanced 9.67 points, or 0.76%, to 1,279.87. The tech-heavy Nasdaq composite was up 14.89 points, or 0.69%, to 2,186.98.
The stock market closes early Monday at 1 p.m. ET. The stock and bond markets will be closed Tuesday in observance of the Independence Day holiday.
The U.S. economy is expected to slow in the second half of the year, analysts say. "If we are right, it will be a 'good' slowdown in which any inflationary pressures in the U.S. will pass, allowing the Fed to stop raising rates and global domestic demand leadership will transfer from the U.S. to the rest of the world," wrote Jim O'Neill, head of global economic research with Goldman Sachs, in a research report. "Equities will outperform bonds-- modestly-- although bonds themselves will recover, led by the U.S."
Investors were digesting a tame batch of economic data before the holiday. The Institute for Supply Management's manufacturing index fell to 53.8 in June from 54.4 in May, compared to an expected increase. Construction spending unexpectedly declined 0.4% in May. June auto sales numbers are also on tap.
In corporate news, General Motors (GM
) was lower after an early surge. Banc of America Securities raised its rating on the automaker from sell to neutral, pointing to a potential deal with Renault-Nissan.
Another analyst upgrade boosted telecommunications-equipment maker Nortel Networks (NT
). Shares gained after Jefferies & Co. upgraded the stock from hold to buy.
On the downside, Wal-Mart (WMT
) was lower after the retail giant reported same-store sales for June that fell at the lower end of its forecast.
Elsewhere, Citigroup (C
) was higher following a report that the financial services giant's chief executive officer dismissed the idea of a break-up.
M&A activity may draw some attention. Michaels Stores (MIK
) was higher after the arts and crafts retailer accepted a $6 billion buyout offer from a private-equity group.
Shares in Encore Medical (ENMC
) rose sharply after the orthopedic-device maker agreed to be acquired by Blackstone Capital Partners in an $870 million deal.
In earnings news, pawnshop operator EZCORP (EZPW
) guided its third-quarter profit higher by 14 cents, to a range of 35 cents to 37 cents per share.
The NYMEX is closed Monday and Tuesday for the holiday. On Friday, August West Texas Intermediate crude oil futures settled up 41 cents at $73.93 a barrel.
European markets finished higher. In London, the Financial Times-Stock Exchange 100 index rose 51 points, or 0.87%, to 5,884.4. Germany's DAX index gained 29.38 points, or 0.52%, to 5,712.69. In Paris, the CAC 40 index was up 14.66 points, or 0.3%, to 4,980.62.
Asian markets finished mostly higher. Japan's Nikkei 225 index rose 66.44 points, or 0.43%, to 15,571.62. In Hong Kong, the Hang Seng index added 59.04 points, or 0.36%, to 16,326.66. Korea's Kospi index edged down 0.54 points, or 0.04%, to 1,294.61.
Treasury yields ticked higher in thin trading ahead of the holiday. The 10-year note fell in price to 99-23/32 for a yield of 5.16%, while the 30-year bond dropped to 89-08/12 for a yield of 5.21%.