U.S. stocks edge forward as crude slumps 2%

Economic Indicators

Wall Street traded slightly higher on Monday despite weak economic data and the sell-off in crude, as investors chewed over remarks from Federal Reserve (Fed) officials.

At 15:13GMT, or 11:13AM ET, the Dow 30 gained 30 points, or 0.16%, the S&P 500 rose 4 points, or 0.20%, while the tech-heavy Nasdaq Composite traded up 36 points or 0.69%.

New York Fed president William Dudley said at an international central bankers conference in Bali on Monday that investors are underestimating how many times policy makers in the world’s largest economy will raise interest rates.

He added that the Fed could hike rates before the November U.S. election if the economy and labor market improve quickly.

In a similar stance, Dallas Fed chief Robert Kaplan insisted that a September hike was still on the table, though he admitted that the U.S. central bank needed to see how things unfold.

“So it’s still too soon to jump to a conclusion,” Kaplan told Bloomberg in an interview and added that the Fed should be “very watchful for the next number of data releases to see what trend we’re on.”

The weak reading of U.S. second quarter gross domestic product last Friday pared market expectations for the Fed’s next move towards policy normalization.

The odds for a rate increase in September were just 12% on Monday with chances for a December hike at just 34.4%, according to CME Group’s FedWatch tool.

On the data front, the U.S. ISM manufacturing purchasing managers’ index (PMI) showedactivity in the sector fell more than expected in July, pulling back from a prior 16-month high.

In a separate report, the Commerce Department said construction spending declined for a third straight month in June to its lowest level in a year.

Despite the weak data, the dollar held onto gains against the other major currencies, pulling back from a five-week low, on Monday.

In company news, Tesla Motors (NASDAQ:TSLA) announced it would buy the solar panel installer SolarCity in a deal valued at $2.6 billion.

Verizon Communications (NYSE:VZ) said it would pick up the GPS vehicle tracking firm Fleetmatics for about $2.4 billion.

Meanwhile, oil prices fell back towards April lows in North American trade on Monday, reapproaching bear market territory as signs of increasing production in the U.S. and rising output among members of the Organization of the Petroleum Exporting Countries weighed.

U.S. crude futures fell 2.12% to $40.72 a barrel by 15:17GMT or 11:17AM ET, whileBrent oil lost 2.07% to $42.63.

Source Investing.com