NEW YORK The pace of growth in manufacturing slowed modestly in May but a gauge of new orders rose to its highest in over a year, according to an industry report released on Friday.
April construction spending rose 0.3 pct
ZAHID SIDDIQUE, ASSOCIATE PORTFOLIO MANAGER OF THE GABELLI EQUITY TRUST
"It seems like it did fine, especially the orders component was particularly strong, and the prices are declining of raw materials and inputs so that could be a positive."
FRED DICKSON, CHIEF MARKET STRATEGIST, D.A. DAVIDSON & CO. LAKE OSWEGO, OREGON
"My read on that would be the economy is still moving ahead at a slow pace. We have to look hard to find something positive, but the manufacturing side of the economy is still moving ahead. The bottom line is we're not contracting, but not moving ahead very fast, and it's not going to offer a whole lot of encouragement to overcome the steady flow of concerning and disturbing news coming out of Europe."
MICHAEL MORAN CHIEF ECONOMIST, DAIWA SECURITIES AMERICA, NEW YORK
"The reading was close to expectations. but the orders index was up noticeably in May and the level, itself, was impressive. It's encouraging to see order flows picking up in this report. The employment index was down in May, but still at a respectable level at 56.9 percent. The production index fell a lot but it started at a firm level and the new reading is still respectable at 55.6 percent. We lost ground from the prior month, but some components of index were not so bad and even mildly encouraging in light of the May employment report which suggested activity might be starting to fade."
TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
"The evidence continues to build that the U.S. economy is losing momentum and the ISM supports that. The conversation within the of Federal Reserve of QE3 has to be on the table."
NICK BENNENBROEK, HEAD OF FX STRATEGY, WELLS FARGO, NEW YORK
"The ISM report is probably pretty inconsequential. There's not much new here. We continue to see moderate positive growth in the manufacturing sector. It's favorable news, but I don't think it's going to offset the worry out there today. The ongoing European difficulties and the U.S. jobs report are the real focus. There is a sense that positions are extended, but there's nothing from the U.S. or European side that is going to break the market's mood."
ALEC YOUNG, GLOBAL EQUITY STRATEGIST AT S&P EQUITY RESEARCH IN NEW YORK
"This is mildly disappointing, but relative to the payroll miss it isn't much. There's a fear that the economy is slowing and the payrolls will drive the psychology. We're very oversold right now but ISM doesn't change much."
STOCKS: U.S. stocks held onto their earlier losses.
BONDS: U.S. Treasury debt prices held steady at higher levels.
FOREX: The dollar extended its losses versus the euro.
(Americas Economics and Markets Desk; +1-646 223-6300)