In yet another in a series of unexpected moves by the broad-based S&P 500 (SNPINDEX:^GSPC), we were offered disappointing factory data only to have the investors shrug off the bad news and buy Friday's dip.
Today's most important news was the Institute for Supply Management's factory index, which fell to 49 in May. Any figure below 50 signals contraction, and this was a pretty sizable drop from the 50.7 reported in April. What's even more confusing is that the Chicago PMI last week was extraordinarily strong at 58.7, which signaled robust manufacturing growth in the Midwest. The likely answer is that the true growth rate of the manufacturing and factory subset is somewhere in the middle of these two figures, which would put the U.S. economy on a continued slow, but steady, recovery.
For the day, the S&P advanced by 9.68 points (0.59%) to close at 1,640.42. There were also plenty of other solid performances within the index today; here's a glimpse at the top three.
Chip maker Intel (NASDAQ:INTC) led the charge, rising by 4%, after Samsung introduced its new Galaxy Note 3 tablet, which runs on Google's Android operating system but has an Intel microprocessor inside. Previous to this tablet, Intel hadn't worked its way into any tablets other than those run on Microsoft's (NASDAQ:MSFT) Windows OS. In fact, Intel's dominance in microprocessors is based almost entirely on its long-running partnership with Microsoft and its Windows OS. However, today's news gives investors hope that Intel will be able to break outside the box and gain industrywide acceptance as it attempts to move beyond just being a PC-processor supplier. All told, I'm impressed with Intel's innovation and consider it the strongest name in technology hardware.
Big Pharma giant Merck (NYSE:MRK) delivered a solid 3.8% gain after reporting encouraging early-stage data on Lambrolizumab, its experimental anti-PD-1 antibody, at the American Society of Clinical Oncology's annual meeting. According to the phase 1b data, Lambrolizumab showed a phenomenal overall response rate of 38% in treating advanced melanoma. Furthermore, most of the adverse events were grade 1/2 (the less serious type), meaning the treatment was generally well tolerated. Immunotherapy stocks were certainly the stars of ASCO, and now all eyes will be on Merck and its anti-PD-1 drug moving forward.
Finally, game and game accessories retailer GameStop (NYSE:GME) added 3.7% in spite of some mounting worries that its used-game sales will suffer with the introduction of new gaming consoles that have built in fail-safes to prevent secondary users from playing a game. GameStop has been closing stores, cutting costs, and focusing on digital gaming to prepare itself for this inevitable shift. The company has had quite the run in anticipation of Microsoft's Xbox One and the debut of Sony's PlayStation 4 later this year, so now may not be a bad time to consider taking some of your profits off the table.