Stock Market Update

[BRIEFING.COM] The market moved slightly lower over the last half hour.

The ISM Non-Manufacturing Index decreased to 48.8% in June (Briefing.com consensus 52.5%) from 53.8% in May. The dividing line between expansion and contraction is 50.0%, so the June reading reflects services sector activity contracting (for the second time in the last three months).

The key takeaway from the report is that it signals a contraction in activity in the nation's largest sector, which should reinforce the market's expectation that the Fed will start cutting rates before the end of the year.

Factory orders declined 0.5% month-over-month in May (Briefing.com consensus 0.3%) following a downwardly revised 0.4% increase (from 0.7%) in April. Excluding transportation, factory orders declined 0.7% on the heels of a 0.5% increase in April. Shipments of manufactured goods also fell 0.7% after increasing 0.84% in April.

The key takeaway from the report is that business spending dropped off in May, which is consistent with a slowdown in manufacturing activity that was seen in the advance report for durable goods.