By Carlos Guillen
Continuing on yesterday's stock market uptick, equities are in the green again as better-than-expected factory orders have helped to throw a bone to investors that needed to take a bite of some solid economic data as they wait for Friday's highly awaited government jobs numbers.
Clearly, with very little in terms of economic data out today, factory orders are serving to add to the market's enthusiasm, which began yesterday with the better than expected manufacturing data points from here at home. According to the U.S. Census Bureau, new orders for manufactured goods during May increased month-over-month by 2.1 percent to $485.0 billion, better than the Street's consensus estimate calling for a 2.0 percent month-over-month rise. Concurrently, new orders for consumer goods rose by 0.5 percent, after decreasing by 0.8 percent in the prior month, and non-defense capital goods (excluding aircraft) rose by 1.5 percent, after increasing by 1.2 percent in the prior month. These orders are considered a proxy for future business investment in items such as computers, engines and communications gear, so despite the fact that the increments have been tepid, the gains have been consistent over the last three consecutive months and may bode well for second quarter gross domestic product growth.
Despite the rather strong move in stocks for most of this morning's trading session, it appears that stocks are losing some ground with the Dow Jones Industrial Average now up just over 15 points after being up over 50 points at its highest level for the day. Investors at the moment are now looking at what Friday's monthly jobs numbers will bring. As it stands, a lot rests on jobs data as the Federal Reserve has said that the strength of the labor market is one of the determining factors of monetary policy. Here again investors will be looking for a goldilocks range. Economists are expecting nonfarm payrolls to increase by 160,000 and the unemployment rate to tick down to 7.5 percent.