US Stock Market Overview – Stocks Surge Lead by the Dow Which Rallied More than 1,200 Points

US stocks surged on Monday rebounding from one of the worst weeks for the major averages. The Dow Jones Industrials led the charge higher, rising slightly more than 5%. All sectors in the S&P 500 index were higher, led by utilities and Financials. Cyclicals were the worst-performing sector. The US 10-year yield tumbled to an all-time low of 1.03% before rebounding to 1.14% later in the session as stocks gained traction. The dollar moved lower, which helped multinational companies. US ISM manufacturing came out worst than expected as fears that the coronavirus will halt economic growth will likely show up in the US numbers for March.

US ISM Manufacturing Misses Estimates

The US ISM manufacturing Purchasing Manager’s Index fell to 50.1 in February from 50.9 in January. That’s the PMI’s lowest level since late 2019, when it fell below 50. Expectations were for the ISM manufacturing PMI to come in at 50.8 for February. Production fell by 4 percentage points last month while the new orders index fell to 49.8 from 52 in the previous month.

US Construction Spending Surged

US construction spending surged 1.8% in January to a rate of $1.37 trillion, according to the Commerce Department Expectations were for growth of 0.9%. Residential construction outlays climbed 2% in January, as lower interest rates have given a boost to home sales and home builders. Warmer weather also helped. Investment in nonresidential projects rose 1.6% and spending on public construction projects rose 2.6%. In December, construction spending was revised up to show a 0.2% increase instead of a 0.2% decline as previously reported.

Chinese ISM Data Comes in Very Weak

Chinese PMI survey data came out worse than expected. China’s February PMI composite tumbled to a fresh record low of 28.9, almost 10-index points below the low from the Great Financial Crisis. The services number dropped sharply as well record low 29.6 versus 54.1 in January. The sub comments were as bad as the headline figures. New Orders, exports and production fell below 30. The Caixin manufacturing PMI fell to 40.3 from 51.1.