The stock markets in the United States gained today driven by the positive performance of equities of companies in the banking sector amid higher bond yields.

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Investors are speculating that the Federal Reserve could delay its action on increasing the interest rates due mixed economic data. The Fed recently reported that the manufacturing output was unchanged in April. The University of Michigan preliminary index of consumer confidence declined to 88.6% in May.

Today, a report indicated that the confidence of U.S. homebuilders unexpectedly dropped this month, an indication that the buyer traffic is slowing and the sales are weakening.

Investors will look for signs regarding the strength of the economic recovery from reports related to the housing market later this week.

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Allan von Mehren, chief analyst at Danske Bank A/S told Bloomberg, “It’s difficult to be too bullish, but it’s also difficult to build a bearish case. This is why stocks seem to be stuck at the moment, although at quite high levels. The macro picture is not that great but it’s not a disaster quite yet. We need to see some better growth figures.”

On the other hand, Walter Todd, chief investment officer at Greenwood Capital commented, “The range-bound nature of all financial markets speaks to the fact that people are really struggling to gauge the direction of the economy and what that implies for the Fed and when they’re going to move.”

Meanwhile, David Doyle, an analyst at Macquarie estimated that the U.S. economy needs to create around 50,000 to 75,000 jobs to maintain an unchanged unemployment rate over the next decade. The unemployment rate was 5.4% in April.

Over the past five years, the economy added an average of 188,500 jobs per month. Doyle suggests that the United States will achieve full employment within a year if the economy continues to create jobs at the same level over the past 12 months.

U.S. Markets

  • Dow Jones Industrial Average (DJIA) – 18,298.88 (+0.14%)
  • S&P 500- 2,129.20 (+0.30%)
  • NASDAQ- 5,078.44 (+0.60%)
  • Russell 2000- 1,257.51 (+1.09%)

European Markets

  • EURO STOXX 50 Price EUR- 3,589.22 (+0.45%)
  • FTSE 100 Index- 6,968.87 (+0.12%)
  • Deutsche Borse AG German Stock Index DAX- 11,594.28 (+1.29%)

Asia-Pacific Markets

  • Nikkei 225- 19,890.27 (+0.80%)
  • Hong Kong Hang Seng Index- 27,591.25 (-0.83%)
  • Shanghai Shenzhen CSI 300 Index- 4,575.14 (-0.92%)

Stocks in Focus

The stock price of Ann surged more than 19% to $46.40 per share. Ascena Retail Grough agreed to buy Ann for approximately $2.2 billion. Ann started to explore a sale in August amid pressure from shareholders including Engine Capital and Red Alder.

Apple gained more than 1% to $130.23 per share today after activist investor Carl Icahn said Apple shares are “grossly undervalued” and “worth $240 today.”

The shares of Altera Corporation increased almost 6% to $46.99 per share due to reports that its negotiations with Intel Corporation resumed, and the companies are expected to reach a buy deal “quickly.”

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