US stocks off highs, but Dow above 15,000

US stock indices eased off from the highs of the day, but share prices remain strongly positive on the first day of the third quarter, boosted by economic data.

The Dow Jones had gained 0.84% or 125 points to stand at 15,035 in the last hour of trading in New York, while the S&P 500 was up 0.91% and the NASDAQ 100 rose around 0.94%. The advances were stoked by data from the Institute for Supply Management that showed manufacturing activity increased in June.

The Dow has advanced more than 14% so far this year, with the S&P just behind with 13%. Although June was a month in which both indices lost ground, it was a strong half to the year despite the headwind of sequestration . The effects of those Federal spending cuts should ease as we progress through the second half of the year, but there remains a large question mark what the Fed will do with its quantitative easing.

Although concerns over tapering have been somewhat allayed by recent comments from various members of the Fed, the future of monetary stimulus is still likely to be at the forefront of concerns this week, where earnings reports are extremely light and some major economic reports are due that are likely to influence the Fed’s decision-making. Prime amongst these is Friday’s employment data for June, which comes after Thursday’s US Independence Day public holiday.

Attention next week is likely to switch from the macro-economy to the performance of individual companies, with Alcoa’s earnings on Monday signalling the unofficial beginning to the second-quarter earnings season.

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