U.S. Manufacturing Stays Hot As ISM Index Dips From 13-Year High
The Institute for Supply Management's manufacturing survey index out Wednesday eased to 58.7 from September's 13-year high of 60.8 as the factory sector seemed to get a continued lift from hurricane rebuilding.
Wall Street economists expected the ISM gauge to dip to 59.5. Readings above 50 signal expansion, while those south of 50 suggest contraction.
The new orders index fell to 63.4 from 64.6, while the current production gauge eased to 61.0 from 62.2. The employment gauge cooled only slightly to 59.8 from a red-hot 60.3.
The 10-year Treasury yield moved dipped to 2.37% after the report. The Dow Jones industrial average, S&P 500 index and Nasdaq composite, which opened with solid gains to fresh record highs, pared much of their early gains following the ISM release.
The recovery in Treasury yields in the past six weeks, helped by stronger economic growth and improving tax-cut odds, have coincided with investors showing renewed interest in bank stocks. On Wednesday morning, shares of Wells Fargo (WFC) briefly cleared a buy point at 56.70 from a double-bottom base. A buy point is the point at which investors have the best chance of near-term gains.
But Wells Fargo lost a little ground after the ISM report and was trading up 0.8% at 56.61.
Meanwhile, automakers were reporting October U.S. auto sales. Ford (F) reported a stronger-than-expected sales gain, General Motors (GM) wasn't as weak as expected while Fiat Chrysler (FCAU) had a big drop as it slashes fleet sales. GM, Ford, and Fiat Chrysler all rose modestly,