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Adam Sarhan MarketWatch Quote: With stocks at record highs, ISM data to set tone

Market WatchApril 1, 2013, 8:10 a.m. EDT

ISM manufacturing data are expected to show improvement

By Barbara Kollmeyer, MarketWatch

NEW YORK (MarketWatch) — With two U.S. stock indexes sitting at record highs, investors on Monday awaited data expected to show further improvement in manufacturing and a rise in construction spending.

Futures for the Dow industrials (CBE:DJM3) reversed early declines to add 15 points, or 0.1%, to 14,512, while those for the Standard & Poor’s 500 index (GLC:SPM3) ticked up 1 point at 1,563.75.

Futures for the Nasdaq 100 index (GLC:NDM3) added 4.50 points to 2,815.50.

European stocks were closed for an extended Easter break, while Asian markets fell after data from Japan and China left some underwhelmed.

Wall Street and most global markets were closed on Friday ahead of the Easter weekend.

It’s a big week for data, ending with the monthly U.S. jobs report on Friday. Monday’s numbers include the ISM manufacturing survey for March, which is expected to show a fourth consecutive month of improvement. Economists polled by MarketWatch forecast the ISM to match February’s level of 54.2%. Any figure over 50% signals expansion.

That data are due for release at 10 a.m. Eastern time. Markets will also zero in on the ISM’s employment gauge, which bounced back early this year and is often a good signal of broader hiring trends. Any employment trends are crucial this week ahead of Friday’s payrolls data. Why the jobs data is key for markets

Also Monday, the Commerce Department is expected to report a 1% rise in construction spending in February after a 2.1% fall in the first month of the year.

Beyond the data, investors are gearing up for the next round of earnings reports, said Adam Sarhan, chief executive of Sarhan Capital.

“It is very important for us to not only look at the actual data, but see how the market reacts to the data,” he said. “Clearly, the bulls are in control of this market evidenced by the great mini rotation and the fact that every pullback since this rally began in November has been shallow in both size (% decline) and scope (days, not weeks). As long as this healthy action continues, the market deserves the bullish benefit of the doubt.”

Wall Street finished on a high note last week, with the S&P 500 index (SNC:SPX) and Dow industrials (DJI:DJIA) both closing at record highs on Thursday. The quarter was also one for the bulls, with the S&P rising 10%, the best performance in a year.

With European markets closed for a holiday, weaker Asian markets provided a slightly downbeat backdrop for Wall Street. A slightly disappointing Bank of Japan tankan survey and a stronger yen pulled down the Nikkei Stock Average, while in China,manufacturing data that showed only a modest pickup also left some slightly gloomy. Hong Kong markets were shut for a holiday.

Among stocks in focus, pharmaceutical companies could get extra attention on Monday after India’s Supreme Court on Monday rejected a bid by Swiss-based Novartis AG (NYSE:NVS) (SWL:CH:NOVN) to grant patent protection to its blockbuster cancer drug Glivec.

Shares of Tesla Motors Inc. (NASDAQ:TSLA) leapt 9.1% in premarket after the company said sales of its Model S car exceeded the target set out for it in February. As a result, the company said it would amend first-quarter guidance to full profitability.

Shares of Apple Inc. (NASDAQ:AAPL) may come under scrutiny after a 17% drop seen in the first quarter and reports that it will cut iPad Mini shipments. Read: Stocks to Watch for Monday

Shares of BlackBerry (NASDAQ:BBRY) added 1.4% in premarket trade as investors continued to react to the company’s surprise operating profit for the fiscal fourth quarter on Thursday.

Cliffs Natural Resources Inc. (NYSE:CLF)  , which jumped 3% on Friday, was up another 2.6% in premarket dealings. J.P. Morgan added the stock to its analyst focus list.

EBay Inc. (NASDAQ:EBAY)  climbed 2.6%. J.P. Morgan raised its price target to $64 in the wake of the company’s investor meeting and repeated its overweight recommendation.


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