US Stock Market Overview – Stocks Fall Led Down by Energy, ISM Comes in Stronger than Expected

US stocks traded under pressure on Friday, as investors took profits following a hectic week of earnings. Commentary about the China trade deal from a frustrated President Trump generated headwind for stocks. All sectors in the S&P 500 index were lower led down by Energy and Real-estate, consumer staples were the best performers in a down tape.

Stronger than expected US ISM failed to buoy stock prices. Volatility edged higher, as US yields were nearly unchanged. Crude oil prices continued to rise on Friday, climbing 4.4%, and settling up 16% for the week. US construction spending for March was higher, but that was prior to the spread of COVID-19 throughout the US.

US ISM Manufacturing Declined Less than Expected

The ISM reported on Friday that manufacturing slump intensified in April to its worst level in 10 years. The ISM Manufacturing Index fell to 41.5, better than expected from March’s 49.1. Expectations were for the index to fall to 35. While virtually every category showed sharp declines, the overall index was held higher by inventories, which showed a reading of 49.7 up approximately 3-points from the March reading  and an 11-point jump in supplier deliveries to 76. New orders were at 27.1, down 15.1 points, while production fell to 27.5, off 20.2 points from a month earlier. The employment index slid to 27.5, a decline of 16.3 percentage points and reflective of more than 30 million claims for unemployment benefits over the past six weeks. The prices index also fell, dropping 2 points to 35.3.

US Construction Spending Rises in March

US construction spending rose 0.9% in March at annual rate of $1.36 trillion, according to the Commerce Department. Expectations had been for a 4.0% decline. Spending in February was revised to a 2.5% fall from the prior estimate of a 1.3% drop. Residential construction increased 2.3% in March, while spending on public construction projects rose by 1.6%.