July 1 - Summary: Shares climb after factory data, construction spending support idea Federal Reserve can keep adding stimulus; Zynga CEO demoted to Chief Product Officer in favor of Xbox chief. Conway G. Gittens reports.
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Stocks begin the second-half of the year with an upswing as economic data show an economy that's not growing too fast.
Markets finished off their highs off the day - actually cutting gains in half by the end of the session.
But a gain is a gain - and it comes on the back of the best first-half of the year since 1998.
Tom Roseen, head of research services at Lipper, says you just can't fight the Federal Reserve.
SOUNDBITE: TOM ROSEEN, HEAD OF RESEARCH SERVICES, LIPPER (ENGLISH) SAYING:
"They've given people no other room but to go into equity funds which is why we are talking about spread products, fixed income taking it on the chin. Investors need some place to go and so they've been doing that. It's been really unique. This is the 25th week we've seen money coming into equity funds - longest run we've had in ages by the way. We have to go back to 1996 to get a longer run of money going into equity mutual funds, ex ETF."
Manufacturing activity rebounded, barely growing in June, according to the Institute for Supply Management. The employment component saw its first pullback since September 2009, something the Fed will certainly consider before pulling back on its stimulus program.
Separately, construction spending rose a softer than expected 0.5 percent in May.
Musical chairs in Silicon Valley. Zynga is downgrading founder Mark Pincus from CEO to Chief Product Officer, replacing him with the head of Microsoft's Xbox gaming division. Under Pincus, Zynga has gone from boom to bust as demand for its games via Facebook flamed out. Zynga's gain is Microsoft's loss. Don Mattrick, the guy who's leaving, is partly responsible for turning the Xbox into a money winner. Shares of Microsoft down for the day, while Zynga shares surged more than 10 percent.
In European news, it was the first official day on the job for new Bank of England Governor Mark Carney. An announcement on interest rates is due following meetings on Thursday - but the central banker is expected to signal low interest rates are here to stay, once he settles into his new role.
European markets finished higher led by a 1-1/2 percent surge for the London FTSE.
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