U.S. stocks little changed after disappointing economic data
U.S. STOCKS were little changed, with the Standard & Poor’s 500 Index poised for the biggest monthly drop since September, as data showed jobless claims increased and the economy grew more slowly than previously estimated.
NEW YORK - U.S. stocks were little changed, with the Standard & Poor’s 500 Index poised for the biggest monthly drop since September, as data showed jobless claims increased and the economy grew more slowly than previously estimated.
The S&P 500 gained less than 0.1 percent to 1,313.60 at 9:31 a.m. New York time.
Concern about Europe’s debt crisis drove the S&P 500 down 6.1 percent so far in May. Financial, commodity and technology companies have fallen at least 7.2 percent in the period. The gauge is on pace for a second straight monthly decline, following the best first-quarter gain since 1998.
Equities were little changed today after data showed gross domestic product climbed at a 1.9 percent annual rate from January through March, down from a 2.2 percent prior estimate. The number of Americans applying for unemployment insurance payments rose last week to a one-month high.
Companies in the U.S. added 133,000 workers in May, according to ADP Employer Services. The median forecast of economists surveyed by Bloomberg News called for a 150,000 advance.
“Bottom line, as also seen in the ADP report, the labor market is no better than just OK,” Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, wrote in a note.
Europe’s fiscal treaty
Investors also watched the latest developments in Europe’s attempts to tame its crisis. Spanish and Italian bonds gained as polls suggested Irish voters will back Europe’s fiscal treaty.
The S&P 500 may rebound almost 3 percent in June based on the average size of moves following past May declines of 4 percent or more, Bespoke Investment Group said.
The benchmark gauge has fallen 4 percent or more in May on 15 occasions since 1928, followed by an average June increase of 2.8 percent, according to data compiled by Bespoke. The index rose in June 60 percent of the time following such moves.
The last time the S&P 500 slid more than 4 percent during May of a U.S. presidential election year was in 1984, when it tumbled 5.9 percent before rebounding 1.8 percent in June. This year’s slide may also mark a bottom for the market followed by a June rally, Justin Walters, Bespoke’s co-founder, said in a phone interview yesterday.
“The data certainly leans positive,” Walters said. “Along with the election analysis and the big down Mays, the risk- reward favors the market going positive here.”
The S&P 500 has averaged a gain of 0.51 percent in June following an increase in May, the Bespoke report showed, and the index has risen 0.96 percent in June after May declines. Its performance next month ultimately will be determined by Europe’s handling of the government-debt crisis, according to Walters.