U.S. stocks fluctuate as investors weigh manufacturing report

Banks Decline

Six of 10 industries in the S&P 500 retreated, with financials falling 1% to pace the losers. Bank of America dropped 2.3% to $13.35 and JPMorgan slid 1.4% to $53.84 for the biggest losses in the Dow.

Bank of America’s $8.5 billion settlement with mortgage-bond investors is set to be considered by a New York court two years after it struck the deal to resolve claims over home loans bundled into securities.

F5 Networks declined 5.5% to $78.61 for the biggest drop in the S&P 500. Morgan Stanley downgraded the shares to equal weight, similar to a neutral rating, from overweight. The stock has dropped 19% this year.

Merck rose 4.9% to $48.98 and Bristol-Myers Squibb Co. added 6.7% to $49.04. The next generation of experimental immune-boosting drugs from the drugmakers are producing such promising early results that doctors at the American Society of Clinical Oncology meeting in Chicago are openly speculating that some patients with the deadliest form of skin cancer may be cured.

Further Gains

The S&P 500 has risen for seven straight months which, combined with its strong start to the year, may indicate further gains for stocks in June, according to Sam Stovall, S&P’s New York-based chief equity strategist.

A seven-month winning streak has happened 13 times since 1945 and it has led to advances of 0.4% on average in the eighth month as stock prices rose 62% of the time, Stovall wrote in a note today. The S&P 500’s advances in January and February may also help as the benchmark U.S. equity index has returned annual gains in each of the 26 years with such a positive start since World War II. The strong starts to the year have been followed by increases of 1% in June compared with its normal flat performance.

“Could sell in May have started in the end of the month, rather than the usual? One could easily infer that from the performance of the last three days,” the strategist wrote. “However, history says, but does not guarantee, that the S&P 500’s performance in June could surprise to the upside.”

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