U.S. stocks close higher on factory orders
SAN FRANCISCO (MarketWatch) -- U.S. stocks closed higher Tuesday after a surprise jump in May factory orders and higher commodities prices that boosted energy and materials stocks.
The Dow Jones Industrial Average (DJIA) finished near its intraday high, advancing 72.43 points, or 0.6%, to close at 12,943.82. Ahead of the midmorning factory orders data, it had been up by 13 points.
The Commerce Department said orders for U.S. factory goods rose 0.7% in May. Economists polled by MarketWatch expected a rise of 0.1%. Read more on factory orders.
Stocks slid Monday after the Institute for Supply Management said U.S. manufacturing in June dropped into contraction territory for the first time in three years. Investors examined the more backward-looking factory orders report for further signs of whether the U.S. recovery had hit a wall. Read more on ISM.
Better-than-expected factory orders were key in boosting the market Tuesday, said Robert Pavlik, chief market strategist at Banyan Partners LLC.
"It was a combination of that and a market recovery from yesterday's lows, and it's pretty quiet today. So the path of least resistance is the market sort of higher," Pavlik said.
"The May reading for factory goods orders provided a pleasant contrast to a dire picture for the health of manufacturing in the ISM report," wrote Andrew Wilkinson, chief economic strategist, at Miller Tabak & Co.
The S&P 500 Index (SPX) closed up 8.51 points, or 0.6%, at 1,374.02. The Nasdaq Composite index (COMP) advanced 24.85 points, or 0.8%, to finish at 2,976.08. The U.S. stock market closed at 1 p.m. Eastern and will be closed Wednesday for Independence Day.
Gold, oil prices boost materials, energy sectors
Energy and materials stocks led the broader market up, with shares of
Gold for August delivery (GCQ2) settled up $24.10, or 1.5%, at $1,621.80 an ounce on the Nymex in advance of the European Central Bank's rate decision on Thursday. The ECB is expected to lower rates. Read more on gold.
On the Dow, 23 of 30 components were higher, led by a 3.3% gain in
In composite volume, about 2.05 billion NYSE-listed shares exchanged hands and 1.01 billion Nasdaq-listed shares traded during the abbreviated session.
J.C. Penney Co. (JCP) shares fell 3.7% as one of the S&P 500's worst performers after a survey showed that retailers' weekly sales rose at the slowest pace in at least nine weeks. Read more on J.C. Penney.