Wall St rebounds despite weak manufacturing data

AAP, with a staff reporter

United States stocks rebounded from Friday's steep losses, despite weak data on manufacturing and construction spending.

The Dow Jones Industrial Average jumped 0.9 per cent to 15,252.03 in closing trade on Monday.

The broad-based S&P 500 gained 0.58 per cent at 1,640.23, while the tech-rich Nasdaq Composite rose 0.27 per cent to 3,465.37.

The Institute for Supply Management's purchasing managers index (PMI) on US manufacturing unexpectedly slumped into contraction territory in May, for the first time since November, and the Commerce Department reported that construction spending in April rose 0.4 per cent, less than half of the increase expected.

"The deteriorating economic data is mitigating some concerns surrounding the Federal Reserve possibly cutting its asset purchases in the near term," Charles Schwab & Co. said.

Part of the rebound was based on expectations that new money would get put to work on the first trading day of the month, said Patrick O'Hare at Briefing.com.

"It has not been lost on many participants that the market has shown an inclination to bounce back from large dips in short order. That understanding could be feeding a buy-the-dip mentality," he said.

Stocks dove in late trade on Friday after a flurry of mixed indicators, pushing the S&P 500 down 1.4 per cent.

Better-than-expected US auto sales in May pointed to a continued pick-up in the auto industry.

Ford shares rose 1.3 per cent after reporting a 14 per cent increase in May sales from a year ago. General Motors climbed 1.6 per cent on a 3.1 per cent year-on-year sales gain.

Apple edged up 0.2 per cent as a New York trial opened pitching the iPhone and iPad maker against government accusations that it led a conspiracy to boost the price of e-books.

Merck leaped 3.8 per cent after announcing encouraging preliminary results on Sunday in the trial of a cancer therapy targeting advanced melanoma.

Zynga plunged 12.0 per cent after announcing plans to cut 18 per cent of its staff to refocus on games for mobile devices.

Bond prices advanced. The yield on the 10-year US Treasury slumped to 2.13 per cent from 2.16 per cent late on Friday, while the 30-year yield fell to 3.28 per cent from 3.31 per cent. Bond prices move inversely to yields.

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