Stock Market Today: June off to a Guarded Start

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The first trading day of June got off to a muted start at the opening of the stock market today.

Shortly before noon, the Dow Jones Industrial Average added 34.66, or 0.23%, to 15,150.23. The Standard & Poor's 500 Index slipped 6.42, or 0.39%, to 1,624,32. The Nasdaq gave back 33.87, or 0.98%, to hit 3,422.04.

Market participants were hoping for a rebound in today's stock market following Friday's steep sell-off.

Jitters over tumbling Japanese stocks and worries about the Fed winding down its market-supportive bond-buying program sent stocks spiraling Friday, the last trading day of May.

The Dow tumbled 208.96, or 1.36%, to 15,115.57, ending the week off 1,987.53, or 1.23%. Yet the blue-chip benchmark still finished May up 1.86%, logging six straight months of gains. The Dow has risen 17 of the past 20 months - its longest streak of gains.

The S&P 500 also rose in May for the first time since 2009. It also enjoyed its best performance since January. Up for seven consecutive months, the S&P has logged gains in 15 of the past 18 months.

The Nasdaq, flat for the week, rose 3.82% in May, marking seven straight months of positive performances.

Investors headed into June with two key economic reports that put a damper on rising stocks.

The Institute of Supply Management's monthly reading on the U.S. manufacturing sector came in at 49 in May, down from 50.7 in April, and below the expected 50.9. Any number below 50 indicates the sector is contracting. This marked only the second time the sector has shrunk since 2009.

The report comes amid a cloudy global manufacturing picture. Released over the weekend, official Chinese government PMI data showed the sector is expanding. Meanwhile an HSBC survey showed contraction.

Also out Monday was a mixed Commerce Department report on April construction spending. Gains in private projects offset a slump in public spending.

Newsmakers in the Stock Market Today

  • Mid-American Apartment Communities (NYSE: MAA) and Colonial Properties Trust (NYSE: CLP) agreed to merge, creating a real estate investment trust (REIT) with a market cap of $8.6 billion. MAA shares slid 3.63%, while CLP rose more than 5%.
  • Rio Tinto plc (NYSE: RIO) shares rose 2.57% after the The Wall Street Journal reported Glencore Xstrata and The Blackstone Group L.P. (NYSE: BX)  are among interested parties who might acquire the Canadian iron ore operations Rio Tinto is looking to sell.
  • NYSE Euronext (NYSE: NYX) said Monday shareholders approved the exchange operator's $8.2 billion takeover by Intercontinental Exchange Inc. (NYSE: ICE).
  • Cracker Barrel Old Country Stores Inc. (Nasdaq: CBRL) jumped nearly 5% after reporting fiscal Q3 earnings rose 30%, handily topping expectations, thanks to strong sales and traffic. The country-style restaurant/retail chain also boosted EPS estimates for the full year.
  • Pandora Media Inc. (NYSE: P) shares sank 11% on news Apple Inc. (Nasdaq: AAPL) signed a deal with the world's No. 3 major music label, Warner Music Group and its publishing arm, as it prepares to launch a free Internet radio product as early as next week.

This Week in the Stock Market

Bidding for lunch for eight with Berkshire Hathaway (NYSE: BRK.A; BRK.B) CEO Warren Buffett reached $130,000 by Monday morning after opening Sunday night at $25,000.

The lunch will be at New York City steakhouse Smith & Wollensky. Last year's winning bid, from an anonymous bidder, was near $3.5 million.

eBay Inc. (Nasdaq: EBAY) closes bidding Friday at 9:30 p.m. Funds raised benefit GLIDE, a San Francisco charity committed to fighting poverty, which serves some 800,000 meals yearly to the poor.

Tuesday, heavily hawkish Richard Fisher of the Dallas Fed speaks about monetary policy, moderately hawkish Kansas City's Esther George about the U.S. economy and dovish Fed Governor Sarah Bloom Raskin addresses job creation trends.

Wednesday, the Fed releases its "Beige Book," a commentary on current economic conditions.

Thursday, the European Central Bank and the Bank of England are expected to stand pat on interest rates. Volume in Netflix Inc. (Nasdaq: NFLX) is likely to tick up ahead of the streaming video and DVD by the mail company's addition to the Nasdaq 100 Index, replacing Perrigo Co. (Nasdaq: PRGO).

Friday brings the crucial May jobs report.

Investors will scour every detail for any signs the Fed could start tapering monetary easing. Nonfarm payrolls are expected to grow 175,000-180,000, with the jobless rate holding at 7.5%. Carefully watched will be whether weekly hours continued to fall in May.

For more on markets today, don't miss our main story for Money Morning members: Russia: The Greatest Threat to the Energy Markets

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