Stocks slip after US manufacturing slows

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NEW YORK | Stocks were moving lower in morning trading Monday following the release of a closely watched report that showed an unexpected slowdown in U.S. manufacturing last month. The market is coming off record highs last week.

Traders Timothy Nick, Glenn Kessler, and Christopher Forbes, left to right, work on the floor of the New York Stock Exchange Monday, June 2, 2014. (AP Photo/Richard Drew)
Traders Timothy Nick, Glenn Kessler, and Christopher Forbes, left to right, work on the floor of the New York Stock Exchange Monday, June 2, 2014. (AP Photo/Richard Drew)

KEEPING SCORE: The Dow Jones industrial average fell seven points, or 0.1 percent, to 16,710 as of 11 a.m. Eastern. The Standard & Poor’s 500 index lost four points, or 0.2 percent, to 1,920 and the Nasdaq composite dropped 21 points, or 0.5 percent, to 4,220. The Dow and S&P 500 both closed at record highs on Friday.

MANUFACTURING: The Institute for Supply Management said that its manufacturing index fell to 53.2 in May, short of what economists had expected. The index was expected to come in at 55.5, up from April’s reading of 54.9, according to FactSet. The index indicates that U.S. manufacturing is still expanding, but at a slower pace.

MADE IN CHINA: The economic news out of Asia was a little more encouraging. A Chinese manufacturing index edged up to 50.8 in May from 50.4 in April. Asian stocks rose on the report. Japan’s Nikkei increased 2.1 percent.

ANOTHER HEALTHCARE DEAL: The real-estate investment trust Ventas said it has reached a deal to buy American Realty Capital Healthcare Trust Inc. in a $2.6 billion cash-and-stock deal. The companies each own medical care offices along with other properties. A.R.C.’s stock rose 97 cents, or 10 percent, to $10.91 while Ventas fell $1.41, or 2 percent, to $65.39.

BROADCOM: Semiconductor maker Broadcom rose $2.65, or 8 percent, to $34.49. The company said it is exploring options for its cellular chip business, which could include selling the division or shutting it down.

BONDS PULL BACK: The yield on the 10-year Treasury note rose to 2.51 percent from 2.48 percent on Friday. Even with the modest increase, bond yields are still trading near their lows for the year.