U.S. stocks extended losses as business activity unexpectedly shrank in April for the first time in more than three years, offsetting a rise in confidence among American consumers.
The S&P 500 dropped 0.4 percent to 1,587.59 at 10:05 a.m. in New York.
The MNI Chicago Report’s business barometer fell to 49 in April, the lowest since September 2009, from 52.4 last month. A reading less than 50 signals contraction. The median forecast of 51 economists surveyed by Bloomberg was 52.5.
Manufacturing, which makes up about 12 percent of the economy, is starting to cool in the wake of across-the-board cutbacks in federal government spending that went into effect in March.
Confidence among U.S. consumers climbed more than forecast in April to a five-month high as Americans’ outlook for the economy and their incomes improved, a separate report showed.
The Conference Board’s index rose to 68.1, exceeding the highest projection in a Bloomberg survey, from a revised 61.9 in March, data from the New York-based private research group showed today. Economists surveyed by Bloomberg forecast an increase to 61.
The S&P 500 rose 0.7 percent to a record high of 1,593.61 yesterday and is heading for a sixth monthly advance, the longest streak of gains since September 2009. The bull market in U.S. equities entered its fifth year last month. The equity gauge has surged 135 percent from a 12-year low in 2009, driven by better-than-estimated corporate earnings and three rounds of bond purchases by the Federal Reserve.