Stocks were slightly positive Monday, steadying against a backdrop of protracted protests in some of the nation’s largest cities, many of which had already been struggling to reopen amid the coronavirus outbreak.
Market participants also eyed tensions between the U.S. and China, after Bloomberg and Reuters reported China had ordered some state-run agricultural companies to halt purchases of American farm goods.
This came after President Donald Trump on Friday said his administration would take action to respond to China’s crackdown on Hong Kong, including removing Hong Kong’s preferential trade status with the U.S. and requesting a working group study Chinese companies listed on U.S. stock exchanges for potential unfair financial practices.
The protests over the past several days centered on constituents’ outrage over the death of George Floyd, who was killed by police in Minneapolis last week in one of the latest public instances of police brutality against an unarmed black man.
Demonstrations since erupted in dozens of cities across the nation, accompanied by looting and destruction of some retail stores and other large and small businesses. The escalation of these protests led governors in two dozen states including Minnesota, California, Illinois and Washington to activate the National Guard, along with mayors in some cities to impose curfews.
“Mass gatherings could spark concerns about a second wave of the virus. We’ll let the medical experts handle this debate, but will weigh in on why this matters for stocks,” Lori Calvasina, head of U.S. equity strategy for RBC Capital Markets, said in a note Monday. “It bears on how quickly the US economy can get back to something resembling normal. Second wave fears could halt reopening or keep behavior cautious.”
A number of major companies temporarily changed operations as they assessed the violence that ensued in recent days. Target (TGT) which is headquartered in Minneapolis and has 73 stores in Minnesota, closed or adjusted hours at 200 stores this weekend. Meanwhile, tech giant Amazon (AMZN) shifted delivery routes in some cities due to the protests, Amazon confirmed in an email to Yahoo Finance after a Bloomberg report, and Apple (AAPL) reportedly extended store closures of some of its outlets.
A number of other corporate executives – including BlackRock CEO Larry Fink, Goldman Sachs CEO David Solomon, Citi CFO Mark Mason and Apple CEO Tim Cook – also issued public remarks on the protests and the events that spurred them.
These developments coincided with a historic downturn in the U.S. economy, rendering tens of millions of Americans jobless as the coronavirus pandemic and measures to contain it swept the country and world. Though many states and cities across the U.S. have begun to undergo a phased reopening process, many economists expect domestic data to hold at very low levels for now. The Labor Department’s May jobs report set for release later this week is expected to show the unemployment rate jump to a record high of 19.6%, the highest based on monthly Bureau of Labor Statistics (BLS) data spanning back to 1948.
4:04 p.m. ET: Stocks rise in first session of June, stabilizing amid protests and US-China tensions
Here were the main moves in markets as of 4:04 p.m. ET:
S&P 500 (^GSPC): +11.42 (+0.38%) to 3,055.73
Dow (^DJI): +91.91 (+0.36%) to 25,475.02
Nasdaq (^IXIC): +62.18 (+0.66%) to 9,552.05
Crude (CL=F): +$0.06 (+0.17%) to $35.55 a barrel
Gold (GC=F): -$1.20 (-0.07%) to $1,750.50 per ounce
10-year Treasury (^TNX): +1.4 bps to yield 0.6620%
2:44 p.m. ET: US crude oil prices tick down 0.1%, or 5 cents, to $35.44 per barrel
Futures for U.S. West Texas intermediate edged down 0.1%, or 5 cents, to $35.44 per barrel Monday. The commodity held onto May’s gains, which sent prices up more than 80% for the month as states’ reopenings stoked hopes of a rebound in energy demand.
12:45 p.m. ET: New York Governor Andrew Cuomo considers curfew for NYC amid unrest
New York Governor Andrew Cuomo said during his daily coronavirus briefing Monday he is weighing a possible curfew in New York City following unrest, lootings and vandalism of stores over the weekend.
“Something has to get done because last night was not acceptable,” he said during the briefing.
Separately, New York state reported a daily death toll of 54 on May 31 from the coronavirus, or the lowest level so far in the period after the virus’s peak. Overall, new cases of the coronavirus in New York state fell below 1,000 for the first time in 11 weeks.
10:13 a.m. ET: Stocks turn positive, led by Financials
The three major indices turned positive Monday morning after opening slightly lower. The Financials and Consumer Discretionary sectors led gains in the S&P 500, while Boeing, American Express and Goldman Sachs led advances in the Dow.
Here’s where the three major indices were trading as of 10:13 a.m. ET:
S&P 500 (^GSPC): +5.23 points (+0.17%) to 3,049.54
Dow (^DJI): +57.14 points (+0.23%) to 25,440.25
Nasdaq (^IXIC): +26.33 points (+0.28%) to 9,518.12
10:03 a.m. ET: Construction spending falls 2.9% April, or less than expected
Construction spending in the U.S. declined by 2.9% in April over the prior month, the Census Bureau said in its monthly report. This was a less drastic decline than expected, with consensus economists bracing for a 7.0% drop in construction spending for the month.
March’s construction spending was revised to unchanged from a 0.9% gain previously reported.
By category, private construction spending declined 3.0% in April, comprising a 4.5% drop in residential construction spending and a 1.3% drop in nonresidential spending. Government construction spending fell 2.5% in April.
10:00 a.m. ET: ISM Manufacturing PMI ticks up less than expected in May
The Institute for Supply Management’s manufacturing purchasing managers’ index (PMI) rose to 43.1 in May, but missed consensus estimates for 43.8. However, the reading stabilized slightly from April’s 11-year low of 41.5.
Subindices tracking new orders, prices paid and employment each rose marginally from April’s low levels. All of these were still in contractionary territory, or below the neutral level of 50.0.
“The coronavirus pandemic impacted all manufacturing sectors for the third straight month. May appears to be a transition month, as many panelists and their suppliers returned to work late in the month,” Timothy Fiore, Chair of the Institue for Supply Management, said in a statement. “However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders.”
9:45 a.m. ET: Decline in U.S. manufacturing activity suggests ‘any recovery will be frustratingly slow’: IHS Markit
U.S. manufacturing activity held in deeply contractionary territory in May, according to IHS Markit’s final monthly purchasing managers’ index. The manufacturing PMI registered at 39.8 in the final print, matching the advance print. This followed a reading of 36.1 in April.
Readings below the neutral level of 50.0 indicate contraction in a sector.
“Manufacturing remained in a deep downturn in May, as measures taken to contain the spread of COVID-19 continued to cause production losses, disrupt supply chains and hit demand,” Chris Williamson, chief business economist at IHS Markit, said in a statement. “Job losses meanwhile continued to run at one of the highest rates in over a decade, and pricing power has collapsed.”
“There remains a high risk that any recovery will be frustratingly slow as ongoing social distancing measures, high unemployment, job insecurity and damaged balance sheets constrain consumer and business spending,” he added. “The recovery will of course also fade quickly if virus infections start to rise again. For now, however, we focus on the good news that we may be past the worst in terms of the economic decline.”
9:31 a.m. ET: Stocks open mostly lower
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): -9.27 points (-0.3%) to 3,035.04
Dow (^DJI): -98.94 points (-0.39%) to 25,284.17
Nasdaq (^IXIC): -4.89 points (-0.03%) to 9,485.95
Crude (CL=F): -$0.92 (-2.59%) to $34.57 a barrel
Gold (GC=F): -$5.90 (-0.43%) to $1,745.80 per ounce
10-year Treasury (^TNX): +3.5 bps to yield 0.679%
7:23 a.m. ET Monday: Stock futures mixed
Here were the main moves in markets, as of 7:23 a.m. ET:
S&P 500 futures (ES=F): 3,044.00, up 2 points (+0.07%)
Dow futures (YM=F): 25,422.00, up 44 points (+0.17%)
Nasdaq futures (NQ=F): 9,540.5, down 19.75 points (-0.21%)
Crude (CL=F): -$0.99 (-2.94%) to $32.72 a barrel
Gold (GC=F): -$8.20 (-0.47%) to $1,743.50 per ounce
10-year Treasury (^TNX): +2 bps to yield 0.664%
6:04 p.m. ET Sunday: Stock futures open lower
Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:04 p.m. ET:
S&P 500 futures (ES=F): 3,017.75, down 24.25 points (-0.8%)
Dow futures (YM=F): 25,378.00, down 79 points (-0.31%)
Nasdaq futures (NQ=F): 9,476.00, down 84.25 points (-0.88%)