Stocks Finish Mixed After Corrected ISM Data

Morningstar

U.S. Market
Stocks recovered from early losses and finished mixed following admitted errors from the Institute for Supply Management.

The ISM Monday morning initially reported a slowdown in manufacturing for May compared with April. However, the ISM had an error in its seasonal-adjustment data and subsequently redistributed the May statistics, which showed an uptick in its purchasing managers' index to 55.4, beating April's reading and signaling more optimism for the summer months. Treasury prices, which had initially rose after the faulty data, fell after the release of the corrected report.

The Markit final PMI for May was 56.4 versus an early-May reading of 56.2. This index was higher than Markit's April reading of 55.4.

The Dow gained 0.2%, and the S&P 500 increased by 0.1%. The Nasdaq fell 0.1%.

Stocks on the Move
Marathon (MRO) announced the sale of its Norway business for $2.7 billion to Det Norske. After adjusting for debt, working capital, and interest, Marathon will net proceeds of $2.1 billion. It also had sought to sell its U.K. business but found no acceptable offers and will retain those assets. Morningstar analysts like this decision, as it frees Marathon from high-decline assets in a high tax region, resulting in a greater overall growth rate and improved after-tax margins. Shares lost 0.6%.

Broadcom (BRCM) shares gained 9.3% after the firm announced it is considering the sale of its cellular baseband segment so it can focus on its broadband, infrastructure, and connectivity operations. By selling the baseband segment, the firm would reap cost savings and also reinvest some of the proceeds into its other businesses.

Ventas (VTR) announced today that it is acquiring its REIT counterpart American Realty Capital Healthcare Trust (HCT) in a cash-and-stock deal valued at $2.6 billion. The move is the latest by Ventas to acquire health-care-related properties. Ventas shares lost 2.8%, while ARC's shares rose 9.7%.

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