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Stocks Mixed After Data

Kevin O'Shaughnessy

U.S. Market
Stocks started off the month on a low note ahead of a heavy week of data, though they had moved into mixed territory by midday.

The Institute for Supply Management's purchasing managers' index came in at 53.2 for May, a lower reading than April's 54.9. Although business activity was still expanding, with the reading higher than 50, the movement was opposite the expected increase to 55.6. The subindexes mostly remained above 50 but were mixed across the board. Treasury prices increased following the release of the ISM report.

Countering the ISM data, 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 was up 0.1% at midday, but the Nasdaq was down 0.2%. The S&P 500 was flat.

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 were flat at midday.

Broadcom (BRCM) shares were up more than 9.5% at midday 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 were down 3.3% at midday, while ARC's shares were up 8.6%.

Foreign Markets
Stocks in Europe were mixed Monday, as the DAX and the FTSE 100 rose 0.1% and 0.3%. The Paris CAC was 0.1% lower.

Asian trading volume was slow as markets on mainland China and Hong Kong were closed. The Nikkei 225 rose 2.1%.