“We have a lot of data giving somewhat conflicting stories,” said Moody’s Analytics capital markets economist Ben Garber, noting the counter effects of improved manufacturing data and continued weakness in consumer spending.
There are “concerns that the economy is not bouncing back as much in the second quarter as people expected,” he said.
Stocks fluctuated around the flatline, with the Dow Jones industrial average outperforming slightly.
“The market is concerned that if the economy can’t grow with rates at zero, then when will it grow?” said Adam Sarhan, CEO of Sarhan Capital. He said Monday’s better-than-expected reports still show an economy below robust levels.
The Institute for Supply Management (ISM) said its index of national factory activity was 52.8 in May, up from April’s reading of 51.5, which had tied with March’s reading as the lowest since May 2013. The reading topped expectations of 52.0, according to a Reuters poll of economists.
Construction spending for April increased 2.2 percent, the highest level in nearly six-and-a-half years.
The May manufacturing PMI index came in at 54.0, slightly above the initial read of 53.8 and little changed from April’s 54.1 report.
Futures held gains after personal income increased 0.4 percent in April. Consumer spending was unchanged from the prior month.
“The sweet spot for the market is something similar to what we saw today—growth is picking up but not going to stoke inflation,” said Jeremy Zirin, head CIO investment strategist at UBS Wealth Management Americas.
The U.S. 10-year yield gained to 2.16 percent, while the 2-year yield traded near 0.62 percent. The U.S. dollar continued to stabilize, trading half a percent higher with the euro below $1.10.
Stocks briefly rose in the open following morning remarks from Federal Reserve policymakers.
Financial regulators need to be on guard against the threat of future financial crises, particularly as banks boost pressure to roll back rules designed to shore up the financial system, Fed Vice Chairman StanleyFischer said at the International Monetary Conference in Toronto. He added that it is unclear if we’re in secular stagnation, and warned against complacency bred from financial stability.
Separately, Boston Fed President Eric Rosengren said Monday that he would like to begin raising rates as soon as possible, but risks from the slowdown in China and Europe in particular loom large even as growth at home is still not strong enough.
Stocks posted gains for May despite closing lower on Friday.
“I think on the first day of the month the market is trying to gain some (strength) after weakness last week, but a lot is going to depend on the barrage of economic news slated to come out this week,” said Peter Cardillo, chief market economist at Rockwell Global Capital.
Monday’s economic reports kick off a week of data. ISM non-manufacturing is expected Tuesday, while Friday brings the key nonfarm payrolls report.
“I think investors are treading very cautiously on the market here because there’s a lot of conflict in the economic data,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
Housing reports have been mostly encouraging, while the overall economy still struggles to show robust growth.
Investors continue to eye Greece, which faces a June 5 deadline for a payment to the International Monetary Fund.
The Dow Jones Industrial Average traded up 17 points, or 0.09 percent, at 18,027, with Walt Disney and JPMorgan Chase leading advancers, with Intel the greatest laggard.
The S&P 500 traded up 1 point, or 0.06 percent, at 2,108, with health care leading five sectors higher and telecommunications the greatest decliner.
The Nasdaq traded up 2 points, or 0.06 percent, at 5,073.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded above 14.
Decliners were a step ahead of advancers on the New York Stock Exchange, with an exchange volume of 220 million and a composite volume of 971 million as of 11:18 a.m.
Crude oil futures for July delivery fell 42 cents to $59.88 a barrel on the New York Mercantile Exchange. Gold futures gained $10.30 to $1,199.70 an ounce in morning trade.
The Dow transports traded flat, pausing recent declines. The index is down 9 percent for the year.
Nobel Prize-winning economist Robert Shiller told CNBC on Monday that the U.S. Federal Reserve should consider lifting interest rates sooner than later, in order to tackle speculative bubbles in the housing and stock markets.
Microsoft announced Windows 10 will be released on July 29. The company had previously said the updated operating system would be released “this summer.”
Apple has filed for a potential yen-based note offering in 2020, with minimum denominations of 100 million yen. The total size of the possible offering was not disclosed in the Securities and Exchange Commission filing.
Bristol-Myers Squibb traded 3.5 percent higher. The stock sank 6 percent on Friday after it unveiled findings for its immunotherapy Opdivo that disappointed investors.