The U.S. equity markets fought the good fight but ended the day in red territory.
At the close: DJIA: -0.04%, S&P 500: -0.45%, NASDAQ: -0.87%.
Here are three stories that helped shape the markets on Monday:
1) Government financial calamities dotted the first months of the year, and concerns that the fiscal cliff and the subsequent sequester would put the economy back in dire straits prompted many analysts and pundits to put forward a negative growth thesis. But so far, while the economic numbers have not been outstanding and gains have been uneven, slight improvements have been made in housing, labor, and manufacturing. Monday’s report on construction spending fits with that trend.
Coming in just above the consensus estimate for a 1 percent gain, the United States Department of Commerce’s Census Bureau reported that construction outlays rebounded 1.2 percent in February to an annualized rate of $885.1 billion… (Read more.)
2) Manufacturing continued to expand in March, albeit at a slower rate than in February, according to the March 2013 ISM Report On Business. The Institute for Supply Management reported that the PMI registered 51.3 percent in March, a 2.9 point decline from February.
March’s PMI is disappointing to investors looking for an excuse to bid up the S&P 500. Economists were expecting manufacturing activity to edge just slightly downward from 54.2 in February to 54.0 in March. This made the 2.9 point decline unexpectedly large and a negative catalyst for Monday’s markets… (Read more.)
3) There’s a lot to be said about the highly controversial bailout of Cyprus. International markets, already on edge in the wake of the 2008 financial crisis and still struggling with low or negative growth, went into red alert a few weeks ago when Cypriot President Nicos Anastasiades first asked for assistance. It’s clear that the event changed the tone of the conversation about Europe’s economic condition, but it’s too early to tell what the full effects will be.
By the time the call for help went out, Cyprus was juggling a banking system with assets equal to 750 percent of its 2012 GDP, which was about $24 billion. Meanwhile, the Troika was juggling complicated and politically tense multibillion-euro bailouts in four major economies… (Read more.)