U.S. Stocks Climb on Data as Industrial, Health-Care Shares Rise

Bloomberg

U.S. stocks climbed, after equities posted their worst week in six, as better-than-forecast growth in manufacturing overshadowed data showing consumer spending stalled.

Bristol-Myers Squibb Co. rose 2.9 percent to lead health-care shares higher, while airlines led a rebound in transportation companies. Consumer discretionary shares gained despite tepid spending by shoppers. Altera Corp. rallied 5.8 percent after Intel Corp. agreed to buy the company for $16.7 billion. EBay Inc. jumped 2 percent. Energy companies slipped with oil prices.

The Standard & Poor’s 500 Index gained 0.2 percent to 2,111.73 at 4 p.m. in New York, after earlier rising as much as 0.6 percent. The Dow Jones Industrial Average increased 29.69 points, or 0.2 percent, to 18,040.37. The Nasdaq Composite Index and Russell 2000 Index rose 0.3 percent. About 6 billion shares traded hands on U.S. exchanges, 6.4 percent below the three-month average.

More from Bloomberg.com: Goldman Sachs Asked Two of the World’s Best-Known Economists If U.S. Stocks Are in a Bubble

“If economic data isn’t negative, but also not really positive, the market loves it,” said Timothy Ghriskey, the chief investment officer at Solaris Asset Management LLC in New York, who helps manage about $1.5 billion in assets. “What we saw today leads us to believe the Fed won’t be in a big hurry to be aggressive with raising rates, and that benefits stock prices. The M&A we’ve seen is a big positive as well.”

Economic DataData today showed manufacturing expanded more than forecast in May as orders grew at the fastest pace in five months. A report also showed consumer purchases unexpectedly stalled in April, raising the risk the biggest part of the economy may take time to gain momentum. A separate gauge said construction spending increased more than estimated.More from Bloomberg.com: Greece’s Tsipras Warns Bell May Toll for EuropeStocks fell last week, trimming their biggest monthly gain since February, amid concerns about the strength of a rebound from a weak first quarter. The S&P 500 climbed 1.1 percent in May, historicallythe second-worst month for U.S. equities, topped only by September.
The index reached a record on May 21, while the Dow Jones Industrial Average and the Nasdaq Composite Index also set fresh highs. Equities in May moved in the narrowest trading range in eight months on the weakest volume this year.More from Bloomberg.com: Peter Lynch Secret to Finding Value Sees Little in S&P 500Last month’s gains came as data indicated the economy was settling into a moderate pace of growth after a first-quarter slump, with the Federal Reserve signaling any increase in borrowing costs would be shallow and gradual. Economists forecast the Fed will increase interest rates in September.Sector MovesEight of the S&P 500’s 10 main groups rose Monday. Industrial, utility, technology and health-care shares advanced the most, while phone companies led declines.The Chicago Board Options Exchange Volatility Index gained 0.9 percent to 13.97, after earlier rising more than 7 percent. The gauge, known as the VIX, slipped 4.9 percent in May for its second straight monthly decline.Health-care companies, the best-performing group last month, added 0.4 percent. Bristol-Myers gained 2.9 percent, its biggest increase in two months, while Intuitive Surgical Inc. climbed 3 percent for its biggest gain in seven weeks. Gilead Sciences Inc. advanced 1.6 percent.Altera surged 5.8 percent, the most in the S&P 500, after Intel agreed to buy the chipmaker for $16.7 billion, adding to a record year for industry consolidation. The Philadelphia Stock Exchange Semiconductor Index added 0.1 percent, after swinging from a 0.8 percent gain to a 0.5 percent drop. Intel and Broadcom Corp. slumped more than 1.6 percent. Xilinx Inc. and Nvidia Corp. rose at least 1.1 percent.EBay, FacebookSoftware and services companies helped boost the tech group, as EBay and Intuit Inc. increased at least 1.9 percent. Facebook Inc. rose 1.4 percent.Consumer discretionary stocks in the benchmark gained even as data showed shoppers’ purchases unexpectedly stalled in April. Dollar Tree Inc., which is seeking federal regulators’ approval of its plan to buy Family Dollar Stores Inc., added 2.7 percent after agreeing to sell 330 of the target company’s stores to alleviate concerns that the combination would hurt competition.Goodyear Tire & Rubber Co. climbed 1.8 percent to its highest close since 2007, while D.R. Horton Inc. advanced 1.2 percent. An S&P index of homebuilders increased 0.7 percent after construction spending in April rose more than forecast.Transports BounceLuxury retailers Michael Kors Holdings Ltd., Coach Inc. and Nordstrom Inc. rose more than 0.8 percent. The gains came as personal income in April rose more than expected, though consumers used the increase to shore up their savings. Michael Kors tumbled 25 percent last week after its outlook disappointed investors.Transportation companies bounced after their worst month since January as airlines rallied. Delta Air Lines Inc., United Continental Holdings Inc. and JetBlue Airways Corp. added at least 2.6 percent.Energy companies declined as oil retreated. Transocean Ltd. and Apache Corp. dropped more than 1.4 percent, while Chesapeake Energy Corp. lost 1.8 percent.More from Bloomberg.com