Mid-Day Recap: Markets Recovering After Two-Week Struggle
Trading has been volatile in the first 90 minutes on Monday but markets now appear to have found a direction. The only data release this morning was the ISM services index, but despite a much better reading than anticipated, the reaction on Wall Street was mixed. Stocks actually turned lower after the 10:00 am release, but 20 minutes later equities began climbing.
As of 11:20, the S&P 500 is erasing losses from the past two weeks with a 0.86% gain to 1,034. The Nasdaq is similarly up 0.88% to 2,066, and the Dow is doing its best to catch up with a 0.63% gain to 9,547.
Once the ISM numbers were released, one would guess that equities would jump higher. Within the hour that was, in fact, the result, but the immediate reaction was in the opposite direction, possibly because the report said only 5 industries reported growth in September, while 13 continued in contraction mode.
That didn’t stop the headline from improving though. The ISM non-manufacturing index rose to 50.9 last month, which isn’t just the first sign of growth in a year, but is also the highest score seen in 16 months.
Millan Mulraine, economist at TD Securities, said the report offered some encouragement “and will likely take some edge from the disappointing employment report” on Friday.
“Given that the non-factory sectors account for over 80% of U.S. economic activity, it is a further indication that the prolonged U.S. economic recession is well and truly over,” he added.
Any recovery continues to be a jobless one, however. The employment component advanced 0.8 points to 44.3, well below the 50-threshold needed to indicate growth.
No more data is scheduled for the rest of the day, and the following four days are relatively light too. But eyes will on bond yields this afternoon as the Treasury holds the following three auctions.
- 11:30 â€
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