Recapping the day's news and newsmakers through the lens of CNBC.
The Devil's in the Data
The Institute for Supply Management (ISM) said its index of national factory activity in May fell to 49.0 from 50.7 in April. A reading below 50 indicates contraction in the manufacturing sector. The last time the ISM manufacturing index fell below 50 was shortly after the East Coast was hit by Hurricane Sandy. A slip in new orders and slackening demand for exports were behind the surprise manufacturing contraction.
A separate report showed construction outlays slightly higher, but less than expected. And turbulence in overseas markets, including another drop in the Nikkei and a slowdown in economic activity in China, weighed on markets.
Bad news could equal good news for the markets, in what's become a recurrent trading argument. More weak economic data could mean a delay to the Fed tapering off its bond-buying program, which has bolstered stocks.
"It [the data] could be greeted positively by the market because as we saw in the past week, when you get a lot of positive economic data or some good economic data points, the market, while it initially reacts positively, begins to get nervous that it may be the beginning of Fed tapering. So ironically, this could be greeted with positive fervor by the market."—Kristina Hooper, Allianz Global Investors
"We always felt that the Fed, at the earliest, was going to begin tapering towards the end of this year because the news, economically, is good, but it's just okay. It's not great. There are headwinds […] with the sequestration cuts hitting the market. We think the economy will get through it and we think we'll start seeing greater acceleration of the economic data in the second half."—Erik Ristuben, Russell
Apple Bottom Is Up?
Apple is back in the news, with the Department of Justice case alleging price fixing in the e-book market under way in New York federal court. But traders and investors are speculating that as court action heats up Apple's share price may have found a bottom after starting its fall in September.
Apple bulls say Tim Cook has stepped out from Steve Jobs' shadow, leading investors like David Einhorn and John Calamos to load up on shares. There's also a pipeline of new innovations, as shown by a flood of patents, which could include a watch, an electronic wallet, a smart pen and greater automotive integration. There were also reports on Monday that Apple is soon to debut a streaming music service.
Apple bears contend the high end of the smartphone market is tapped out and that consumers are showing less demand for incremental innovation (opting to keep their old iPhone 4S when the 5 is available, for example).
"The smart money is buying and some say the technicals and fundamentals suggest reasons […] to celebrate."—CNBC's Josh Lipton