The US economy’s service sector expanded in August but at a slower pace than in July, and the fall from the previous month was the largest since the 2008 financial crisis, a report by the Institute for Supply Management (ISM) showed.
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Six of the 10 major S&P 500 indexes were higher, led by a 0.77 percent rise in energy .SPNY .
“The headline appears to be “bad news is good news” again as investors are taking weaker-than-expected non-manufacturing data and translating it into “lower for longer” for the Federal Reserve”, said Jack Ablin, chief investment officer at BMO Private Bank.
At 9:41 a.m. ET the Dow Jones industrial average .DJI was up 46.06 points, or 0.25 percent, at 18,538.02.
Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers. (UTX) and Nike Inc.(NKE) topping blue-chip decliners. Danaher’s shares were down 2.1%.
US markets have been trading in a tight range in the past few months, with the S&P 500 not moving more than 1 percent in either direction on a daily basis since July 8. “But the lack of alternative investment choices will continue to drive USA stocks higher in the short term because of relatively attractive valuations”, Cavanaugh said.
A weaker-than-expected reading on the US services sector in August added to views the Fed will refrain from raising interest rates at its meeting this month.
Apple (AAPL.O) shares were up 0.19 percent at $107.90 in thin premarket trading. General Electric Co. also fell 0.77%, weighing on blue chips. 3D printing companies Stratasys and 3D Systems rose 3.8 per cent and 5.6 per cent, respectively.
The dollar index fell by the most since July 29.
Spectra Energy jumped 13.2 per cent to US$40.9, giving the S&P 500 its biggest boost, after Enbridge agreed to buy the company for US$28 billion (RM114.3 billion).
Navistar jumped 31.2 percent after Volkswagen agreed to supply engines to US truck maker in exchange for a 16.6 percent stake.
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Cepheid (CPHD) soared 52% to $52.36 following news that conglomerate Danaher Corp.(DHR) plans to buy (http://www.marketwatch.com/story/danaher-to-buy-diagnostics-maker-cepheid-for-about-4-billion-2016-09-06) the maker of clinical testing gear for $53 a share in cash, or about $4 billion. On the Nasdaq, 1,377 issues rose and 1,009 fell. European stocks were slightly higher, gold futures gained, and a key dollar index lost ground. Enbridge rose 3.9 per cent.
