August 18, 2022

Wall Street Shrugs Off Rise in Factory Orders

Wall Street reacted coolly on Tuesday after the latest economic data offered some mildly encouraging news on United States factory orders.

The Commerce Department said that factory orders rose 0.8 percent in May, after a downwardly revised drop of 0.9 percent in April. Much of the increase was driven by orders for aircraft — which jumped 36.5 percent — but the report also said that companies are investing in computers and other equipment.

Release of the report caused a slight flurry in buying, but within minutes the major indexes had returned to where they started the day: flat.

At 2 p.m., the Dow Jones industrial average was up 8.59 points, or 0.07 percent, to 12,591.36, and the Standard Poor’s 500-stock index was up 0.94 points, or 0.07 percent, to 1,340.61. The Nasdaq composite was 11.33 points, or 0.40 percent, higher to 2,827.36.

Since concerns over an imminent Greek debt default were dampened by the Greek Parliament’s vote last week to back fresh austerity measures, investors were turning their gaze to more fundamental economic issues, such as the state of the United States economy.

A run of economic data this week will end with Friday’s June nonfarm payrolls data, which often sets the market tone for a week or two after its release.

Last week’s Institute for Supply Management manufacturing survey came in much better than anticipated, stoking hopes that the recent soft patch in American economic data may have been a temporary blip associated with the devastating earthquake in Japan.

Should the coming economic data and the second-quarter earnings come in strong, a number of analysts say they think stocks will rally in the months ahead, especially if European debt worries ease.

“In the second quarter, global equities were negatively impacted by a series of global macro events, which have bruised investor sentiment and left equity valuations looking very reasonable against long-term benchmarks,” said Tony Shepard, an analyst at Charles Stanley, a London-based brokerage.

Trading in global markets was fairly light on Tuesday.

In Europe, the FTSE 100 index of leading British shares was up 6.49 points, or 0.11 percent, while Germany’s DAX lost 3.52 points, or 0.05 percent. The CAC 40 in France was down 24.28 points, or 0.61 percent.

Developments over Greece continue to be monitored for their potential to turn market sentiment. On Monday, a rally in stocks came to a halt after Standard Poor’s warned that a plan for French banks to roll over the debts would be considered a Greek debt default.

Earlier in Asia on Tuesday, Japan’s Nikkei 225 index rose narrowly to 9,972.46, a two-month closing high.

South Korea’s Kospi rose 0.8 percent to 2,161.75 while Hong Kong’s Hang Seng slipped 0.1 percent to 22,747.95.

In mainland China, the Shanghai composite index gained 0.1 percent to 2,816.36 and the Shenzhen composite index added 0.6 percent to 1,195.83 despite mounting speculation that the People’s Bank of China may raise interest rates soon.

There was similarly lackluster trading in the oil markets. Benchmark oil for August delivery was up $1.83 at $96.77 a barrel on the New York Mercantile Exchange.

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