The stock markets in the United States declined due to the lower-than-expected manufacturing data today. The S&P 500 was down 0.04%, the NASDAQ dropped 0.20% and the Russell 2000 fell 0.52%. The Dow Jones was up 0.04%.
The Institute for Supply Management (ISM) reported that the manufacturing index dropped 3.2% to 55.5% in December from 57.8% in November.
Equities did well last month as most market watchers have noted that Value outperformed growth. In his March Factor Performance report, Alex Botte of Venn by Two Sigma noted that March was a strong month for the global Equity factor, especially in developed markets. Q1 2021 hedge fund letters, conferences and more He said Europe Read More
The institute also reported that the new orders index declined 8.7% from 66% while the production index fell 5.6% to 58.8% from 64.4%. Inventories of raw materials contracted 6% to 45.5%.
“Comments from the panel are mixed, with some indicating that falling oil prices have an upside while others indicate a downside. Other comments mention the negative impact on imported materials shipment due to the West Coast dock slowdown,” according to Bradley J. Holcom, chairman of the of the ISM.
In a telephone interview with Bloomberg, Peter Sorrentino, a fund manager at Huntington Asset Advisors said, “Investors are looking for validation that the economy is, in fact, as strong as advertised.”
“There’s a nagging fear that the market is a bit overpriced for the actual speed of the economy. The market may struggle to find its footing here in the first couple of days until we get some more data points out,” added Sorrentino.
On the other hand, Eric Wiegand, a senior portfolio manager at U.S. Bank Wealth Management commented, “The data failed to meet early expectations, but is still trending in the right direction. We expect more volatility, but as you look around the globe; we’re still in expansionary territory and that not the case with our major trading partners.
In Europe, the manufacturing sector grew less than expected. China’s manufacturing index declined to its lowest level in 18 months.
- Dow Jones Industrial Average (DJIA) – 17,832.99 (+0.06%)
- S&P 500- 2,058.16 (-0.04%)
- NASDAQ- 4,726.81 (-0.20%)
- Russell 2000- 1,199.45 (-0.44%)
- EURO STOXX 50 Price EUR- 3,139.44 (-0.22%)
- FTSE 100 Index- 6,547.80 (-0.28%)
- Deutsche Borse AG German Stock Index DAX- 9,764.73 (-0.42%)
- Nikkei 225- 17,450.77 (-1.57%)
- Hong Kong Hang Seng Index- 23,857.82 (+1.07%)
- Shanghai Shenzhen CSI 300 Index- 3,533.71 (+2.20%)
Stocks in Focus
The stock price of Linn Energy LLC (LINE) increased more than 12% to $11.40 per share after GSO Capital Partners committed $500 million for its drilling programs. GSO Capital agreed to finance 100% of the costs associated with new wells that will be drilled by Linn Energy under the DrillCo Agreement.
Weight Watchers International, Inc. (WTW) plummeted almost 14% to 21.53 per share today as the company’s rebranding initiative failed to impress investors. The company lost more than 33% of its stock value over the past year.
Perfect World Co., Ltd. (PWRD) climbed more than 22% to $19.26 per share acter its founder, Michael Yufenf Chi offered to acquire all of its shares for $20 per share and the company private. Perfect World is the third Chinese online gaming company listed in a U.S. stock market.