Stocks settle mixed as attention shifts to U.S.-China trade talks.
The U.S. stock market traded mixed on Monday, as investors rallied behind stronger than expected PMI data that seemed to alleviate the risk of recession for American manufacturers.
The major indices settled mixed after trading in positive territory for most of the session. The Dow Jones Industrial Average (NYSEARCA:DIA) advanced 14.92 points, or 0.1%, to 26,949.99.
The large-cap S&P 500 Index (NYSEARCA:SPY) reversed gains to finish flat at 2,991.78. Gains were largely driven by consumer staples and information technology companies.
Meanwhile, the technology-focused Nasdaq Composite Index (NYSEARCA:QQQ) declined 0.1% to 8,112.46.
A measure of 30-day volatility known as the CBOE VIX (NYSEARCA:VXX) finished slightly lower on Monday, reflecting underlying calm in the stock market. VIX settled down 2.7% at 14.91.
In economic data, U.S. manufacturing and services activity improved in September, alleviating concerns about a protracted slowdown in key domestic industries. The IHS composite manufacturing purchasing managers’ index (PMI) improved to 51.0 in September from 50.7 the month before. The manufacturing gauge rose to 51 and the services indicator climbed to 50.9.
“The survey indicates that businesses continue to struggle against the headwinds of trade worries and elevated uncertainty about the outlook,” said Chris Williamson, Markit’s chief business economist. “Although picking up slightly, the overall rate of growth in September remained among the weakest since 2016, commensurate with GDP rising in the third quarter at a subdued annualized rate of approximately 1.5%. Prospects also look gloomy, with inflows of new business down to the lowest since 2009 and firms’ expectations of growth over the coming year stuck at one of the most subdued levels since 2012.”
The Final Word: Improved PMI data alleviate the risk of an imminent recession for U.S. manufacturers. Earlier this month, the Institute for Supply Management (ISM) said the manufacturing industry contracted in August for the first time in three years.