U.S. stock exchange traded funds saw an early rally fade Monday after a weak manufacturing report for July raised concerns the economy is stuck in a soft patch.
Equity ETFs opened sharply higher Monday after the Obama administration and congressional leaders reached a deal to raise the debt ceiling and cut spending by more than $2 trillion over the weekend.
However, stocks fell into the red after the Institute for Supply Management said its manufacturing index fell to 50.9 in July from 55.3 the previous month. [Industrial ETFs Fall]
“Now that a tentative agreement has been reached between the President and Congressional leadership on the debt ceiling, markets will focus on whether these leaders can corral enough votes on both sides of the aisle to covert this agreement into law,” said David Kelly, chief market strategist at JP Morgan Funds.