US open: Dow trades higher following manufacturing PMIs

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Wall Street stocks were mixed early on Monday but the Dow Jones still managed to kick off the second quarter in the same manner it wrapped up the first.

As of 1545 BST, the Dow Jones Industrial Average was up 0.86% at 33,560.91 and the S&P 500 advanced 0.20% to 4,117.45, while the Nasdaq Composite came out the gate 0.47% weaker at 12,164.36.

The Dow opened 286.76 points higher on Monday, extending gains recorded in the previous session.

Oil prices surged at the open on Monday, with West Texas Intermediate up 6.34% at $80.47 per barrel and Brent Crude 6.20% higher at $84.84 a barrel. The moves came hot on the heels of an announcement from Saudi Arabia and other OPEC+ members that they will make a voluntary cut of 5% of output - or around 500,000 barrels per day.

On the macro front, factory sector activity in the US softened a bit more quickly than anticipated during the previous month, according to the Institute for Supply Management's manufacturing sector purchasing managers' index, which slipped from a reading of 47.7 in February to 46.3 in March. Consensus had been for a decline to 47.1.

A subindex for new orders fell from 47.0 to 44.4, denoting a faster rate of contraction than in February, while the subindex for employment slipped fell from 49.1 to 46.9, and the subindex tracking the prices paid by firms slipped from 51.3 to 49.2.

Elsewhere, S&P Global's March manufacturing PMI came in at 49.2, broadly in line with a flash estimate of 49.3 and above February's reading of 47.3, the weakest pace of contraction in the sector in the five months, as output rose for the first time since last October and employment increased modestly.

Finally, construction spending slipped 0.1% month-on-month in February, according to the Census Bureau, dropping to a seasonally adjusted annual rate of $1.84trn. The decline follows January's 0.5% rise but was broadly in line with expectations for a flat monthly reading.

No major corporate earnings were slated for release on Monday.

Reporting by Iain Gilbert at Sharecast.com

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