US stocks end mixed, dipped 8.70 points

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IANS | 03 Jul, 2012
US stocks ended mixed Monday as the latest weak manufacturing data added to hopes that the Federal Reserve could launch more stimulus policies to bolster the economy, Xinhua reported.

When the market closed, the Dow Jones industrial average dipped 8.70 points, or 0.07 percent, to 12,871.39.

The Standard & Poor's 500 was up 3.35 points, or 0.25 percent, to 1,365.51. The Nasdaq Composite Index gained 16.18 points, or 0.55 percent, to 2,951.23.

Major indexes started the day on strong note as investors still cheered the progress in Europe on tackling the region's debt problems.

During last week's summit, leaders of European countries agreed on a batch of positive steps to deal with the debt crisis.

Investors were especially pleased to hear that the eurozone's two bailout funds, known by their acronyms EFSF/ESM, will be able to recapitalize banks directly, rather than first handing over the money to the government of the country where they are based.

The hopes for Europe gave a huge boost to the market Friday and continued to help the market after the weekend.

However, stocks erased gains in midday trading after latest data showed the US manufacturing sector contracted for the first time since 2009.

According to the Institute for Supply Management, its monthly index fell to 49.7 in June from 53.5 in the previous month.

The reading, which was below 50, indicates contraction in the sector, marking the end of almost three years of growth in domestic manufacturing.

Adding to the concerns, the index's new orders component which is a forward-looking indicator, fell 12.3 percentage points in June to 47.8, which was also the first contraction in more than three years.

Stocks regained momentum afterwards as investors were hoping the poor data added to the chance that the Fed may finally step in and launch another round of quantitative easing measures in its policy-making meeting at the end of the month.