Economic Journal - Thursday, 5/31/2012

(As of 8:03 am pacific)

Stocks opened lower as economic and jobs data disappoints.  Payroll processor, ADP, reported this morning that private-sector payrolls increased 133,000 in May from a downward revised 113,000 in April.  Private sector job growth appears to be slowing down in the 2^nd quarter as the average monthly gain thus far is 123,000 jobs added per month.  In the 1^st quarter 200,000 private sector jobs were added per month.  The US Labor Dept. reported that US jobless claims (people filing for unemployment benefits) rose 10,000 last week to 383,000 as claims from 2 weeks ago were revised up from 370,000 to 373,000.  Economists had expected jobless claims to remain level at 370,000.  According to the Commerce Dept. US GDP growth for the 1^st quarter was revised downward to 1.9%, slower than the originally estimated 2.2% growth.  Economists expected a drop to 1.8% and are forecasting a pick up in growth in the 2^nd quarter to 2.2% annualized.  A disappointing surprise was that consumer spending was revised downward from a 2.9% gain to a 2.7% gain in the 1^st quarter.  Lastly, and perhaps the most surprising report of the morning was that Chicago PMI (an index that measures business activity in the Chicago area) fell 3.5 points to 52.7 in May from 56.2 in April, recording its lowest level since September 2009.  European stocks started their trading session up from yesterday’s lows, but quickly turned lower as US economic reports disappointed investors.  Trading volumes in Europe were low, indicating investors are nervous about stocks and looking more to safe havens.  Asian stocks stumbled on European fears, especially those issues facing Spain, Italy and Greece.  Oil prices shed 1.22% to 86.68 while gold lost 0.22% to 1562.  The US dollar was mixed and the 10 yr. treasury fell to 1.60%.  30 yr. mortgage rates dipped slightly to 3.76%.  The volatility index (VIX) added 3.36% to 24.95.  The month of May has not been kind to markets or investors.  Going into today, the S&P 500 was down 6.1%.

Economic Journal - Wednesday, 5/30/2012

(As of 7:53 am pacific)

Markets around the world were sharply lower today after posting strong gains yesterday.  The Dow, S&P and Nasdaq were down 1% as European woes and Spanish debt concerns dominated the headlines.  Concern over when Spanish banks may need a bailout sent Spanish government bond yields soaring to euro-era highs.  The European Central Bank came out with a statement rejecting the claims of a Financial Times report Tuesday that the central bank had no plans to recapitalize Spain’s Bankia S.A.  The ECB reported that was not true and they had not spoken with government officials yet.  Spain’s government did say however that it plans to pay for the 19 billion euro bailout of Bankia S.A. with cash it hopes to raise through a treasury auction.  To add to the concern, independent credit-rating firm Egan-Jones downgraded Spain’s credit rating to B from BB-.  European stocks were down between 1.5% and 2.0%.  In the US, investors took their cues from Europe, selling shares and flocking to safe havens.  On the economic front, the index of pending home re-sales dropped 5.5% in April according to the National Association of Realtors.  After a 3.8% gain in March, April’s report hints at an uneven recovery in the housing market.  Asian shares also were down as hopes for an aggressive Chinese stimulus waned and worries over Spain added to the selloff.  Oil prices fell 2.96% to 88.09 per barrel on supply issues, and gold fell 0.66% to 1541.  The US dollar strengthened as investors reached for the safety of the greenback.  10 yr. treasury yields slipped 9.7 basis points to 1.65% and 30 yr. mortgage rates fell slightly to 3.78%.  The volatility index (VIX) rose 10.51% to 23.24 at 7:52 am pacific.

Economic Journal - Tuesday, 5/29/2012

(As of 7:38 am pacific)

Stocks rise to start the week after the markets were closed yesterday in observance of Memorial Day holiday.  The Dow, S&P, and Nasdaq all surged over 1% in early trading as investors considered data from several US economic reports.  According to the S&P/Case-Shiller 20-city composite index, home prices were unchanged in March.  Over the previous 12 months home prices have fallen 2.6% and remain near post-recession lows.  A report from the Chicago Fed which measures manufacturing activity showed that the index rose 2.4% in April.  Meanwhile, US consumer confidence fell for a 3^rd straight month to 64.9 in May down from a revised 68.7 in April.  May’s reading is the lowest since January and comes in well below economist estimates of a slight bump up to 70.  European markets rose as news on a Greece exit from the Euro zone will have to wait until mid June and the upcoming election.  Spanish stocks, however, slumped on concern over liquidity and a fragile banking sector as borrowing costs continued to rise.  Asian stocks jumped higher as investors anticipate future Chinese stimulus to boost growth.  Oil was up 1.14% to 91.72 while gold added 1.50% to 1583.  The US dollar was mixed and the 10 yr. treasury yield traded slightly down at 1.73%.  30 mortgage rates traded at 3.80%.  The volatility index traded slightly lower, down 0.60% to 21.63 at 7:37 am pacific.

Economic Journal - Friday, 5/25/2012

(As of 8:07 am pacific)

Stocks drifted lower as Europe grapples with bank concerns.  Reuters reported this morning that Spain’s Catalonia is running out of debt financing options.  Several other regional governments have requested help in regaining access to capital markets.  Spain’s banking concerns seem to be weighing on the US markets more than positive US economic news.  In the US, the University of Michigan/Thomson Reuters consumer sentiment index climbed to 79.3 in May from 76.4 in April.  It was the highest level since October 2007.  In the year before the recession the confidence reading averaged 87.  In Europe, research firm GfK reported the German consumer confidence index was steady in May at 5.7, with an identical reading forecasted for the month of June.  Asian stocks traded choppy on Friday amid concerns over slowing Chinese bank lending and uncertainty over the European debt crisis.  Oil was up slightly to 90.83 and gold edged up 0.38% to 1566.  The US dollar was mixed and the 10 yr. treasury yield fell slightly to 1.75%.  30 yr. mortgage rates edged up to 3.82%.  The volatility index (VIX) rose slightly, up 1.16% to 21.78.

Economic Journal - Thursday, 5/24/2012

(As of 8:36 am pacific)

Stocks traded slightly lower to start and then returned to positive territory on several  economic reports.  The Labor Dept. reported US jobless claims fell 2,000 to 370,000 last week.  Claims from 2 weeks ago were revised up to 372,000.  Economists expected claims to rise to 373,000.  The 4 week average of claims dropped by 5,500 to 370,000, the lowest level in 6 weeks.  In a separate report, the Commerce Dept. showed orders for US durable goods rose 0.2% in April recording the 2^nd rise in 3 months.  Economists expected a decline of 0.4%.  Removing transportation out of the reading, orders actually declined 0.6%.  A weak point in the data was in core capital goods which fell 1.9%.  In Europe, the Munich based IFO Institute said its business climate index dropped to 106.9 in May, down 3 points from 109.9 in April, leaving the business sentiment gauge in Europe’s largest economy at its lowest level since November.  The index is based on surveys sent to over 7,000 businesses in various sectors throughout Germany.  Also reported was the Markit composite PMI index for the Euro-Zone, which fell to a 35 month low of 45.9 from 46.7 in April, signaling contractionary levels.  The euro dropped to a 22 month low as Euro leaders emphasized their push to keep Greece in the euro zone.  In Asia, China reported its preliminary reading of the HSBC manufacturing PMI index showed a drop to 48.7 in May, down from a final reading of 49.3 in April.  Commodities surged with oil rising 1.42% to 91.18 and gold edging higher to 1572.  The US dollar was mixed and the 10 yr. treasury yield rose slightly to 1.76%.  30 yr. mortgage rates inched higher to 3.81%.  The volatility index traded flat, down just 0.2% to 22.23 at 8:36 am pacific.

Economic Journal - Tuesday, 5/22/2012

(As of 7:38 am pacific)

Stocks open flat after recovering Monday with some of the biggest gains of the year.  Monday snapped 2 weeks of trading losses with the Dow gaining 135 points and the Nasdaq posting a 2.5% gain.  Today, markets opened flat with investors weighing Japan’s downgrade and anticipating a US existing home sales report due out later this morning.  The National Association of Realtors reported a rise in sales to a seasonally adjusted annualized rate of 4.62 million, up from a downwardly revised 4.47 million in March.  Economists estimated a rate of 4.6 million.  Sales rose 10% year over year.  It was the 10^th straight month of year over year gains.  Fitch Ratings downgraded Japan’s sovereign bond rating to A- from AA with a negative outlook which means there is potential for future downgrade as well.  Gold and the Japanese Yen fell as the US dollar rose.  Facebook continues to dominate the US corporate news as shares continued to decline, down 18% from the IPO price.  Debate picks up on what’s caused this decline including mishandling of lead underwriter Morgan Stanley and the errors of the Nasdaq exchange.   In Europe, the Stoxx 600 rose 1.24% snapping a 5 day losing streak on Monday, carried by gains in auto and resources stocks.  In economic news, the Organization of Economic Cooperation and Development (OECD) cut its forecast for growth in the euro-zone projecting a 0.1% contraction in 2012 returning to 0.9% growth in 2013.  The OECD also has taken a supportive stance of the much talked about idea of joint issuance of euro-bonds.  In Asia, markets rallied on the heels of Monday’s US gains.  Pro-growth comments from China’s Premier Wen Jiabao over the weekend held up shares as investors swept in for bargain stocks.  Oil was down 0.41% to 92.19 while gold shed 0.39% to 1583.  The US dollar gained against most major currencies while the 10 year treasury yield jumped 5.7 basis points to 1.79%.  30 yr. mortgage rates held at 3.79%.  The CBOE Volatility Index (VIX) was down 4.91% to 20.93 at 7:21 am pacific.

Economic Journal - Monday, 5/21/2012

(As of 8:23 am pacific)

Stocks rise after last week’s sharp selloff marked the worst week of the year for US major stock indices.  Stocks rallied slightly on Monday on optimism over G-8 meetings.  G-8 leaders met at Camp David over the weekend to discuss issues related to Europe.  All eight leaders agreed out of the meeting their desire for Greece to remain in the euro-zone.  They also discussed plans for growth-related initiatives to spur the euro-zone economy.   Stocks in Europe rose after G-8 comments and Asian shares gained as China signaled it would support the economy if it continues to weaken.  In company news, shares of Yahoo rallied 4% as Alibaba Group agreed to repurchase shares from Yahoo valued at $7.1 billion.  Lowe’s Companies slumped 10% after reducing its earnings forecast for the year.  Dominating the headlines was social media giant, Facebook.  After a lackluster IPO on Friday, where shares finished the day up just 0.6%, investors sold on Monday as Facebook shares slid 13% at one point to $33.34.  Perhaps the bigger story on the Facebook IPO was the glitch on the Nasdaq exchange which caused a 30 minute delay in trading on Friday and several mishandled orders that affected investor confidence in the exchange.   Commodities rose with oil up 0.72% to 92.14 and gold up slightly to 1593. The US dollar was mixed while the 10 yr. treasury yield traded flat at 1.73%.  30 yr. mortgage rates climbed slightly to 3.80%.  The CBOE volatility index slipped 10.52% to 22.46 at 8:22 am pacific.

Economic Journal - Tuesday, 5/15/2012

(As of 10:14 am pacific)

Stocks open higher on positive US economic reports.  The Empire State Manufacturing Index rebounded to 17.1 in May ahead of expectations.  Retail sales cooled down in April after strong gains in the first 3 months of the year.  The Commerce Dept. reported that sales at US retailers increased just slightly, up 0.1% in April.  Many economists believe some sales were pulled into March figures due to an early Easter holiday.  The Consumer Price Index (CPI) remained in check as falling gas prices offset rising prices of food, apparel and autos.  Core CPI, which excludes volatile food and energy prices rose 0.2% in April.  Gas prices dropped 2.6% for the month.   The National Association of Home Builders/Wells Fargo Index rose to 29 from 24 in April beating expectations and recording the best reading since May 2007.  A reading of 50 or more means that more builders view conditions as good versus poor.  In Europe, stocks continued their retreat as Greece heads to new elections after party leaders are unable to agree on the formation of a coalition government.  Fresh elections will most likely take place in mid June.  WTI crude oil fell 0.5% to 94.32 while gold shed 0.42% to 1554.50.  The US dollar was mostly up across major currencies and the 10 yr. treasury yield rose slightly to 1.78%.  30 yr. mortgage rates remained near all-time lows at 3.75%.  The VIX was down 3.98% to 21.00 at 10:13 am pacific.

Economic Journal - Monday, 5/14/2012

(As of 10:20 am pacific)

Stocks start the week in a sharp decline as investors worry about Greece’s potential exit from the euro-zone and Spanish and Italian bond yields jump.  The Dow opened with triple digits declines as the major headlines surrounded Europe and the inability of Greece to structure its government.  In Europe, the Stoxx 600 shed 2% led by bank stocks as investors weighed the drama in Greece.  Spanish and Italian bond yields rose 24 and 32 basis points respectively as debt concerns continued in Europe.  Commodities were hit hard, with oil continuing its decline, dropping 1.8% in early trading.  The price of oil has dropped considerably over the past couple weeks being led by demand concerns and weak economic data.  Monday’s drop came after Saudi Arabia’s oil minister said the European benchmark Brent crude should be trading at $100 per barrel. WTI crude was down 1.68% to 94.51. Gold continues its retreat after hitting its 2012 low on Friday.  Investors continue to flock to the safety of the US dollar as concerns over Europe remain.  A stronger greenback tends to drag down dollar-priced commodities, including gold.  Gold prices fell 1.41% to 1562 on Monday.  The US dollar strengthened and the 10 yr. treasury yield fell 6 basis points to 1.78%.  The 30 yr. mortgage rate fell to 3.76%.  The CBOE volatility index (VIX) was up 5.98% to 21.08.

Economic Journal - Friday, 5/11/2012

(As of 7:29 am pacific)

Stocks open Friday in a downward trend led by JP Morgan Chase after the banking giant reported in an unexpected conference call yesterday that a $2 billion trading loss due to a large position in credit default swaps will effect Q2 results.  Shares of JP Morgan fell 9.17% in early trading.  Stocks rallied back paring early morning losses as markets filtered other economic data.  The Labor dept. released data showing the Producer Price Index (PPI) fell 0.2% in April, the biggest decline since October.  The drop was led by falling gas prices at the end of April.  The unadjusted 12 month rise of 1.9% was the weakest since October 2009.  Factoring out volatile food and energy prices, the core PPI edged up 0.2% for April.  In Europe, stocks were down as the European Commission said in its Spring forecast Friday that the Euro-zone was in a “mild recession”.  They also projected gross domestic product for 2012 to contract by 0.3%, and would rebound to grow 1% in 2013.  They expect unemployment to remain high, near 11%.  In China, economic data for April came in weaker than expected indicating a continued economic slowdown.  China’s industrial output rose 9.3% in April, missing estimates of 12.2%, while retail sales were up 14.1%, shy of analysts estimates of a 15.1% rise.  The Hang Seng Index fell 1.3% after the data was released.  Chinese CPI rose 3.4% from a year earlier, but was down 0.1% month over month showing signs slowing inflation and cooling in prices.  Oil fell 0.77% to 96.33 while gold also dropped 0.41% to 1589.  The US dollar was mixed and the 10 yr. treasury yield fell to 1.84%.  30 yr. mortgage rates remained at 3.78%.  The CBOE volatility index (VIX), was up 1.96% to 19.20 at 7:28 am pacific.

Economic Journal - Thursday, 5/10/2012

(As of 8:21 am pacific)

The market recovered this morning after 6 straight days of losses as Europe was out of the headlines at least for the moment.  The news was primarily dominated by economic headlines.  US first time jobless claims came in flat, falling 1,000 to a seasonally adjusted 367,000 last week, as economists expected a decline to 365,000.  Claims from 2 weeks ago were revised upward to 368,000 from 365,000.  The 4 week rolling average fell 5,250 to 379,000.  According to the Labor Dept., US import prices fell 0.5% in April after a revised March reading of 1.5%.  Economists expected a 0.2% decline.  Excluding the volatile fuel sector, US import prices rose 0.1% last month.  Export prices rose 0.4% in April after a 0.8% rise in March.  The Commerce Dept. reported today that US trade deficit widened 14.1% in March to $51.8 billion, above the forecast of $50 billion.  The widening in deficit was in line with forecasts.  The government estimated that GDP growth slowed in the first quarter to 2.2% annualized rate from 3.0% in the 4^th quarter last year.  In China, trade surplus unexpectedly widened for April.  In normal circumstances a widening trade surplus is a good thing as it would indicate exports are exceeding imports and more cash flow is coming into the country and more goods are being produced therein.  In China’s case, the surplus widening is more a symptom of imports declining because of a weakening demand for goods of people/businesses in China.   Japan’s trade surplus shrank more than expected.  Asian markets were mixed on the day.  In Europe, stocks recovered after getting crushed this week as other economic news took over the headlines.  Oil reversed morning gains trading slightly down at 8:09 am pacific at 96.73, while gold traded flat at 1594.  The US dollar was mixed and the 10 yr. treasury yield was up 5 basis points to 1.90%.  30 yr. mortgage rates remained low at 3.78%.  The VIX traded lower, down 1.10% to 19.86.

Economic Journal - Wednesday, 5/9/2012

(As of 7:20 am pacific)

After taking back half of the day’s losses yesterday, markets open in a sharp decline with the Dow set to extend its losing streak to 6 straight days, the longest since August.  Stocks continue to slide as worries continue over Greece’s inability to form a government and the worsening of the European debt crisis.  Greece continues to struggle through formation of a coalition government after this past weekend’s elections and has become even more vulnerable to a lack of funding, causing discussion that Greece may have to leave the Euro-zone.  This week’s Greek struggles have impacted the government bonds of nearby countries, as Spain and Italy have seen rates soar on their 10 year bonds.  Spanish 10 year yields rose 2.5% to 6% and Italy 10 year yields rose 2.5% to 5.6%.  In Spain, stocks declined sharply today led by the Spanish banking sector.  In the US, stocks continued to decline on European woes and a “sell in May, go away” attitude.  In corporate news, shares of Walt Disney rose 2% as the company reported higher than expected profits before the bell.  Macy’s shares plunged 4.35% after reporting higher profits but failing to hike its 2012 guidance.  Yahoo shares continue to get beat up over the controversy surrounding the academic background of new CEO, Scott Thompson.  The board member involved in the hiring of the new CEO has reportedly decided to step down.  In Asia, stocks were down across all major indices on worries over Greece and the Euro-zone.  Oil prices dipped again today, down 1.12% to 95.92, while gold fell 1.22% to 1585.  The US dollar gained across the board, as investors fled risky assets and flocked to safe haven of the greenback.  10 yr. treasury yields fell 3 basis points to 1.81% and 30 yr. mortgage rates remained at all-time lows at 3.78%.  The volatility index continued to climb, up 7.30% to 20.44.

Economic Journal - Tuesday, 5/8/2012

(As of 8:07 am pacific)

Stocks head into a sharp decline Tuesday as worries over Europe, namely Greece, set in.  The Dow Jones Industrial Average extended losses to a 5^th straight session as Greece’s struggles to form a functioning government sent amplified concern over the debt crisis in Europe to the global markets.  The Greek stock benchmark closed the day at a two-decade low, while the Stoxx 600 and the DAX shed nearly 2%.  In the US, stocks retreated on European woes and lackluster corporate earnings.   Shares of McDonald’s declined 1.6% after April sales missed estimates.  Game-maker Electronic Arts Inc. declined 7.27% on an earnings missed and watch-maker Fossil Inc. plunged 37.50% after cutting its 2012 forecast.   In economic news, US home prices edged up 0.6% in March for the first time since July 2011.  The National Federation of Independent Business reported that its small business optimism gauge rose to 94.5 matching a post-recession best.   Commodities were hard today with oil prices continuing the retreat, down 2.04% to 95.94 and gold was off 2.17% to 1603.50.  The US dollar climbed and the 10 yr. treasury yield fell 4 basis points to 1.83%.  30 yr. mortgage rates fell to 3.79%.  The CBOE volatility index climbed back over 20, up 8.61% to 20.57.

Economic Journal - Monday, 5/7/2012

(As of 7:51 am pacific)

Stocks down to start the week on European political concerns.  French presidential elections wrapped up over the weekend with socialist candidate Francois Hollande defeating incumbent President Nicolas Sarkozy to become the first social president in France in over 30 years.  While the French election of Hollande wasn’t a surprise, questions still remain regarding his relationship with Germany’s Chancellor and austerity measures taken to bolster Europe’s recovery.  In Greece, investors fret after voters left the nation’s two largest pro-bailout parties short of a majority ruling in Parliament and support continues to surge for smaller parties opposed to austerity measures for Greece.  Greek shares were down 7.3% on the day.  Asian stocks retreated on European political concern with the Nikkei down 2.78% and the Hang Seng down 2.61%.  US stocks traded cautiously mid-morning with the Dow the biggest loser, down 55 points or 0.42%.  The US economic calendar is quiet on the day with March consumer credit data due out at 3 pm eastern.  Oil prices continued to plummet, down 1.88% to 96.64, while gold also slipped 0.56% to 1636.  The US dollar gained and the 10 yr. treasury yield remained below 2% at 1.87%.  30 yr. mortgage rates were at 3.79%.  The CBOE volatility index traded up 2.51% to 19.64.   

Economic Journal - Thursday, 5/3/2012

(As of 7:32 am pacific)

Stocks open slightly down as US jobless claims drop ahead of estimates.  According to the Labor Dept., US jobless claims declined by 27,000 to 365,000 last week.  Claims from 2 weeks ago were revised up to 392,000 from 388,000.  Economists had expected jobless claims to drop to 378,000.  The Labor Dept. also reported on Thursday that productivity of US businesses and workers dropped 0.5% for the first quarter.  Economists estimated a decline of 1.0%.  The manufacturing sector continued to show signs of improvement, jumping 5.9% in the first quarter.  Most of the decline in productivity came outside the manufacturing sector.    Planned jobs cuts were up 7% in April to 40,559 according to outplacement firm Challenger, Gray & Christmas.  April’s reading was 11.2% higher than this time last year.  In Europe, stocks retreated after ECB President Mario Draghi’s press conference Thursday.  Draghi said economic outlook for the euro-area remains subject to downside risk pointing to ongoing tensions in sovereign debt markets.  He also said that demand for credit remains weak but is confident that the LTRO program would have a positive impact on lending once liquidity feeds through the system.  The ECB left its key lending rate at 1% and said its stance on monetary policy remains “accommodative.”  Asian stocks fell Thursday as banks weighed on the Hong Kong markets.   Oil prices dropped sharply, down 1.85% to 103.26 and gold was down 1.03% to 1637.  The US dollar was mixed and the 10 yr. treasury yield drifted up slightly to 1.94%.  30 yr. mortgage rates remained at all time record lows of 3.82%.  The VIX was up 1.54% to 17.14.

Economic Journal - Wednesday, 5/2/2012

(As of 8:00 am pacific)

Stocks open down after disappointing US jobs data and European woes.  Payroll processor, ADP, reported this morning that the US private sector added 119,000 jobs in April, the weakest figure in 7 months.  According to ADP, service-sector jobs rose 123,000 while goods-producing jobs fell 4,000.  Manufacturing employment fell 5,000.  ADP also revised March’s jobs numbers from 209,000 originally reported to 201,000.  The markets were cautious, but are anticipating Friday’s US non-farm payrolls to come in.  The Commerce Dept. reported orders for goods purchased in US factories dropped 1.5% in March, the biggest decline in 3 years, but slightly better than estimates.   In Europe, stocks were down as markets opened after being closed for yesterday’s May Day holiday.  Stocks started the day in positive territory on yesterday’s gains in the US then quickly turned lower as data released showed that the seasonally-adjusted unemployment rate in the euro-zone rose to 10.9% in March from 10.8% in February.  Other data released showed Manufacutring PMI in the euro-zone fell at a faster pace than initially estimated in April.  The Markit purchasing managers index fell to 45.9 from a 47.7 reading in March, signaling contraction.  Individual countries such as Greece, Italy, and Spain reported accelerating downturns.  Germany reported manufacturing PMI fell to a 33 month low of 46.2.  In Asia, the broad market rallied as investors reacted to improved manufacturing data out of China and the US.  Reported earlier in the week, China’s manufacturing PMI rose to 53.3 in April, up from 53.1 in March, and showing improvement for the 5^th straight month.   Oil was down 0.45% to 105.68 and gold was down 0.40% to 1655.70.  US dollar was mostly up against major currencies while the 10 yr. treasury yield dipped slightly to 1.91%.  30 yr. mortgage rates remained at 3.81%.  The VIX was up 5.30% to 17.48.

Economic Journal - Tuesday, 5/1/2012

(As of 7:54 am pacific)

Markets ticked up to open as investors anticipated 2 reports this morning – ISM manufacturing data and monthly construction figures.  The Institute for Supply Management reported at 7 am pacific Tuesday that its gauge for manufacturing output rose to 54.8% from 53.4% in March, the highest reading since June 2011.  A reading over 50% indicate expansion.  This was a surprise to investors as analysts expected the ISM index to fall slightly to 53.3% as recent reports had been lagging.   Also reported this morning, the Commerce Dept. announced that US construction projects rose 0.1% in March.  It was the first gain in 3 months, but fell short of estimate of 0.5%.  February construction spending was also revised down from  a 1.1% drop to a 1.4% decline.  The market seemed to shrug off the construction report and focused on manufacturing data as the ISM index surprised many.  Most European markets and Asian markets are closed today in view of the May Day holiday.  The market finished down yesterday as the Chicago-area purchasing managers index fell to its lowest level since November 2009.  April closed as the worst month of the year for US stocks with the Dow eeking out a 0.1% gain, the Nasdaq shedding 1.80% and the S&P down 0.8%.  On the day, oil prices added 0.94% to 105.84 while gold traded flat at 1663.  The US dollar was mixed and 10 yr. treasury yields remained low at 1.90%.  The 30 yr. mortgage rate remained near historic lows at 3.81%.  The VIX shed 3.67% to 16.52.