Stocks waver as US service sector improves

Written By Unknown on Selasa, 06 Mei 2014 | 00.33

NEW YORK — Stocks are little changed in midday trading Monday as investors weigh an improving outlook for the U.S. economy against a report that showed Chinese manufacturing contracted for a fourth straight month in April.

KEEPING SCORE: The Standard & Poor's 500 index rose a point, or 0.1 percent, to 1,881 as of 12:14 p.m. Eastern time. The Dow Jones industrial was flat at 16,512. The Nasdaq composite rose three points, or 0.1 percent, to 4,127.

SERVICE GROWTH: U.S. service firms grew more quickly last month as sales and new orders rose, adding to other evidence that the economy is picking up after a slow start to the year. The Institute for Supply Management says its service-sector index rose to 55.2 in April from 53.1 in March. Any reading above 50 indicates expansion.

DRUG STORE SALES: Walgreen rose $1.04, or 1.5 percent, to $69.92 after the company reported revenue from established drugstores jumped 7.6 percent last month, topping analysts' expectations. Sales were helped by a later Easter holiday.

CHINA SLOWDOWN: China's manufacturing contracted in April, but the pace of decline was less severe, suggesting the downturn in the world's No. 2 economy is bottoming out. HSBC's purchasing managers' index released Monday ticked up to 48.1 from 48.0 in March on a 100-point scale. Numbers above 50 indicate expansion.

THE QUOTE: The S&P 500 is trading close to its all-time closing high of 1,890 set April 2 and the Dow is also just below its record close of 16,580, set last week. Stocks may struggle to push higher in the immediate future amid concern about the ongoing tensions between Russia and Ukraine and against a backdrop of faltering growth overseas, said Jim Russell, regional investment director at US Bank.

"We're at very high levels relative to history," Russell said. "And we're not at all amazed, or disappointed, that a little bit of a minor pullback could be at hand."

BOND HIT: JPMorgan slumped $1, or 1.8 percent, to $54.48 after the bank said late Friday in a quarterly filing that it expects revenue from its bond and stock market unit to be down about 20 percent in the second quarter in a "continued challenging environment." The bank's first-quarter earnings were crimped by lower revenues at its bond trading business.

WEAK DRUGS: Pfizer fell 71 cents, or 1.8 percent, to $30.04 after the drug company said Monday that its first-quarter profit dropped 15 percent despite sharp cost-cutting. The earnings decline reflected competition from cheaper generic drugs. Pfizer has been trying since January to get British rival AstraZeneca to discuss its bid to buy the company, but AstraZeneca continues to rebuff Pfizer.

POWER MOVE: Utilities companies rose the most in the S&P 500 index. The utility sector has risen 12.5 percent, making it the best performing industry group in the S&P 500 this year, as investors favor stable companies that pay big dividends.

BONDS AND COMMODITIES: Bond prices fell. The yield on the 10-year Treasury note edged up to 2.61 percent from 2.59 percent on Friday. The yield is close to its lowest of the year and has fallen from 3 percent at the start of January. The price of oil fell 33 cents, or 0.3 percent, to $99.45 a barrel.


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