By Shreyashi Sanyal and Shristi Achar A
(Reuters) – The S&P 500 and the Dow were subdued in choppy trading on Monday after manufacturing data amplified worries of an economic slowdown, while gains in the shares of Meta boosted the Nasdaq.
The New York Federal Reserve’s “Empire State” index on current business conditions dropped to a reading of -31.8 in May, against expectations of a -3.75 decline.
“What you’re seeing is an indication that people are a little worried about the strength of the economy, perhaps going into a recession earlier than maybe expected,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
This followed data last week that showed consumer sentiment slumped to a six-month low in May and U.S. long-term inflation expectations jumped to the highest since 2011.
Focus will now turn to retail sales, weekly jobless claims and housing data expected through the week.
Shares of Meta Platforms Inc rose 2.2% after Loop Capital upgraded it to “buy” from “hold”.
Also limiting losses were hopes of progress on a deal to raise the nation’s $31.4 trillion borrowing limit. Over the weekend, President Joe Biden said he expects to meet congressional leaders on Tuesday and remained hopeful of a deal to raise the debt ceiling.
The months-long standoff in Washington has added to economic worries, as a new non-partisan congressional report cited “significant risk” of a historic default within the first two weeks of June.
At 12:49 p.m. ET, the Dow Jones Industrial Average was up 18.89 points, or 0.06%, at 33,319.51, the S&P 500 was up 6.87 points, or 0.17%, at 4,130.95, and the Nasdaq Composite was up 54.49 points, or 0.44%, at 12,339.23.
Atlanta Fed President Raphael Bostic said on Monday he does not expect any interest-rate cuts this year, while Minneapolis Fed President Neel Kashkari said inflation is “much much too high” despite the rate hikes.
However, Chicago Fed President Austan Goolsbee said his decision to support a rate hike at the meeting in May was a “close call” as he weighed the impact of credit tightening from recent bank stress.
Investors now await comments from Fed Chair Jerome Powell on Friday for any clues on potential rate cuts this year.
Oneok Inc fell 8.7% as it agreed on Sunday to buy U.S. pipeline operator Magellan Midstream Partners in a $18.8 billion deal. Shares of Magellan jumped 13.7%.
Western Digital Corp jumped 10.5% after Reuters reported the memory chip firm and its Japanese JV partner Kioxia Holdings Corp are speeding up merger talks.
Advancing issues outnumbered decliners by a 2.14-to-1 ratio on the NYSE and by a 1.92-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and seven new lows, while the Nasdaq recorded 44 new highs and 110 new lows.
(Reporting by Shreyashi Sanyal and Shristi Achar A in Bengaluru; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila and Arun Koyyur)