Getty Images
Stocks were mostly higher on Tuesday even after economic data released after the U.S. open showed inflationary signals.
The
gained 93 points, or 0.3%, while the
and the
were little changed.
Economic data put a damper on earlier stock gains, with value shares, more sensitive to changes in economic expectations, outperforming growth names. The Purchasing Managers Index for May rose to 62.1, topping estimates of 61.5 and the previous reading of 61.5. This could signify inflation, which investors are watching, as the Federal Reserve could soon lift bond yields, which erodes the present value of future cash flows and weighs on stocks valuations.
Before the data hit, Tom Essaye, founder of Sevens Report Research wrote, “if we get that strong [PMI] number (along with strong pricing indices) then pressure will build on the Fed to at least acknowledge a discussion about tapering has begun.” Tapering means reducing its bond purchases, lowering bond prices and lifting yields.
Also, the Institute for Supply Management’s manufacturing index rose to 61.2 in May, above estimates for 60.5 and the last result of 60.7. The prices component was elevated, at a reading of 88.
Oil futures rose to the highest in more than two years, after the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, reportedly forecast a 6 million barrel a day jump in world oil demand this year. With demand heating up, “less supply and increasing demand” is sending the price higher, writes Robert Yawger, director of Energy Futures at Mizuho Securities U.S.A.
The price of WTI crude oil rose 2% to more than $67 a barrel. Oil had hit $66 several times this year but had failed to break past that point until Tuesday.
The Stoxx Europe 600 gained 0.75% to a fresh record high. Tokyo and Sydney stocks ended with slight losses, while other markets advanced, with the
rising 1.1% and the
adding 0.6%.
(ticker: CLDR) announced it was being purchased by private-equity firms at a 24% premium. The stock rose 24%.
(DVN) stock gained 12% as oil prices rose and the shares got upgraded to Strong Buy from Outperform at Raymond James.
(NIO) stock was up 8.2% after getting upgraded to Buy from Neutral at Citigroup.
(BA) stock added 2.7% after getting upgraded to Outperform from Market Perform at Cowen.
Corp. (TAC) stock rose 2.6% after getting upgraded to Outperform from Market Perform at BMO Capital Markets.
(LITE) stock dropped 1.4% after getting downgraded to Neutral from Buy at Goldman Sachs.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
