Closing Bell: Stocks Rise on Tepid Manufacturing Data
U.S. stocks rose Monday as investors put concern about the potential for higher interest rates on hold after a report showed the economy isn't growing fast enough for the Federal Reserve to start winding down its stimulus programs.
The Dow Jones industrial average (^DJI) added 65 points (0.4 percent) to close at 14,974, falling back from above the 15,000 level, which it surpassed earlier in the day, when it gained 173. The S&P 500 (^GSPC) rose 8 points, for a similar 0.5 percent gain, to 1,614. The Nasdaq (^IXIC) added 31 points (0.9 percent) to 3,434.
U.S. manufacturing grew modestly in June after a pickup in new orders and stronger production, according to a private survey. The Institute for Supply Management said its factory index increased to 50.9 in June from 49 in the previous month.
A separate report on construction spending added to the picture of a gradually improving economy. Construction spending rose 0.5 percent in May compared to April, when spending was up 0.1 percent, the Commerce Department said.
Sponsored Links
In other business news, the U.S. government said it has received $66.3 billion in dividend payments from mortgage giants Fannie Mae and Freddie Mac, after both reported stronger earnings at the start of the year. Fannie Mae paid $59.4 billion to the U.S. Treasury while Freddie Mac paid $7 billion. The payments reflect a housing recovery that has made the mortgage giants profitable again, and are also helping to lower the federal deficit.
Former KPMG partner Scott London pleaded guilty to a securities fraud charge for providing insider information to a friend who plied him with cash bribes, a Rolex watch and other luxury items. London, who entered the plea in U.S. District Court in Los Angeles, could receive up to 20 years in prison when he's sentenced in October.
Among the stocks making big moves:
Onyx Pharmaceuticals (ONXX) surged $44.51, or 51 percent, to $131.33 after the company rejected a takeover bid from Amgen (AMGN), a larger biotechnology company. Onyx said other companies have expressed interest in a buyout.
Cablevision (CVC) rose $1.63, or 9.7 percent, to $18.45 after Reuters reported that Time Warner Cable (TWC) is considering making a bid for the company.
Steinway Musical Instruments (LVB) has agreed to be bought by private-equity firm Kohlberg & Co. for about $438 million. The 160 year-old company suffered from a lack sales during the recession, and while shares have recovered they have yet to return to the peak they achieved just six months prior to the economic downturn. Steinway shares ended Monday's trading up about 16 percent to $35.28.
A Credit Suisse analyst resumed his coverage of Best Buy (BBY) and lifted the electronics chain's prior price target as it continues to work on a turnaround plan. Shares of Best Buy rose sharply to $29.74.
Shares of Tesla Motors (TSLA) rose 9.1 percent to $117.18, their highest price ever, on optimism that the electric car company's deliveries for the second-quarter and full year will be higher than expected.
Google (GOOG) notched a legal victory in its bid to create the world's largest digital books library, winning the reversal of a court order that had allowed authors challenging the project to sue as a group. The 2nd U.S. Circuit Court of Appeals in Manhattan said it was too early for authors to be considered as a group in a lawsuit against the search-engine giant. Google stock advanced almost 1 percent.
Nokia (NOK) rose by more than 3 percent, after the former mobile phone leader announced plans to buy out partner Siemens' (SI) entire 50 percent stake in Nokia Siemens Networks for $2.2 billion.
What to watch Tuesday:
The Commerce Department releases May data on factory orders at 10 a.m. ET. Analysts expect manufacturing activity rose 2 percent during the month, according to consensus estimates.
Automakers report June sales figures. Industry watchers forecast auto sales rose slightly to 15.5 million units last month, up from 15.3 million in May.
Compiled from staff and wire reports.
%Gallery-183453%
