Disheartening economic data, namely from private-sector jobs and manufacturing growth, pointed to a slowing economy, sending markets and exchange traded funds (ETFs) lower.
The Institute for Supply Management index of activity in manufacturing – the purchasing managers’ index, or PMI – declined from 60.4 in April to 53.5 in May, which was well below the expected drop to 57.0, report Steven Russolillo and Brendan Conway for The Wall Street Journal. Nevertheless, readings above 50 indicate an expanding economy. [Economic Data Tempers Gains in U.S. Markets and ETFs.]
The lower-than-expected employment number from private-sector jobs in the U.S. only increased by 38,000 last month, whereas economists had previously anticipated an influx of 190,000. According to the ADP report, the employment gauge plummeted to 58.2, a low last seen in October 2010, from 62.7.
The ISM’s production index fell from 63.8 in April to 54.0 and new orders dropped from 61.7 to 51.0, a low last seen in June 2009, write Alex Kowalski and Shobhana Chandra for Bloomberg.
Construction spending inched up 0.4% in April, but the number was revised downward from the previous month.
- SPDR S&P 500 ETF (NYSEArca: SPY) is down 1.3%.
- PowerShares QQQ (NasdaqGM: QQQ) is down 1.17%.
- SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) is down 1.4%.
For more information on the U.S. markets, visit our S&P 500 category.
Max Chen contributed to this article.
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