Markets make cautious gains
NEW YORK, June 5 (UPI) -- U.S. market indexes made tentative gains Tuesday following upturns in Asia and Europe.
Markets posted gains despite weak economic data on European service businesses.
Researchers at Markit reported the Purchasing Managers Index for services in the 17-member eurozone hit a three-year low in May, coming in at 46.7 with numbers below 50 indicating a contraction.
Investors are also keeping an eye on Europe's financial crisis. German Chancellor Angela Merkel signaled a willingness do discuss integrating debt in Europe with a long-term payback plan.
In early afternoon trading on Wall Street, the Dow Jones industrial average added 7.53 points, or 0.06 percent, to 12,108.99. The Standard & Poor's 500 gained 3.09 points, or 0.24 percent, to 1,281.27. The Nasdaq Composite added 4.99 points, or 0.18 percent, to 2,765.
The benchmark 10-year treasury note fell 5/32 to yield 1.543 percent.
The euro fell to $1.244 from Monday's $1.25. Against the yen, the dollar hit 78.71 from 78.35 yen.
In Tokyo, the Nikkei 225 index added 1.04 percent, 86.37 points, to 8,382.
Business index in Europe near 3-year low
BRUSSELS, June 5 (UPI) -- A broad measure of business activity in Europe dropped in May to the steepest decline in nearly three years, Markit reported Tuesday.
With numbers below 50 indicating a contraction, the Markit Eurozone Composite Output Index fell from 46.7 in April to 46 in May in the 17-member eurozone .
The market research firm cited "widespread weakness across the currency union, with output falling across the big-four nations."
The index for Germany came to 49.3, a 34-month low. For France, the index dropped to 44.6, a 37-month low.
Italy's services business index posted a two-month low at 43.5, while Spain's index fell to a 6-month low at 41.2.
"Companies report business activity to have been hit by heightened political and economic uncertainty, which has exacerbated already weak demand both in the euro area and further afield," said Markit Chief Economist Chris Williamson.
"Based on these numbers, it would not be surprising to see (the) gross domestic product for the region contract by 0.5 percent int he second quarter, though an even steeper decline could be seen if the June data disappoint," he said in a statement.
Companies in Europe were "blighted by the persistent weakness of demand, leading to further job losses," the report said. New business orders are near a three-year low for the region.
Markit's Eurozone Service Business Activity Index, also released Tuesday, dropped from 46.9 in April to 46.7 in May, the firm said. The service index, released a weak after the manufacturing index, has shown contraction in eight of the past nine months with Germany the only eurozone country reporting service industry growth in May.
U.S. service sector firms up growth
TEMPE, Ariz., June 5 (UPI) -- The pace of growth among U.S. service industries picked up speed slightly in May, the Institute for Supply Management said Tuesday.
After showing slower growth for two consecutive months, the Purchasing Managers Index for May came to 53.7, up from April's 53.5 reading.
With numbers above 50 indicating growth, May marked the 29th consecutive month of growth in the U.S. service sector.
The index for new orders in May rose from 53.5 to 55.6. The employment index, however, slowed from 54.2 to a near break-even month at 50.8.
Both the new orders and the production indexes have remained positive for 34 consecutive months, the production index rising from 54.6 to 55.6. The employment index, while slipping close to 50, has been positive for 5 consecutive months.
In the month, 13 of 18 service industries tracked in the report showed growth, led by information services, transportation and warehousing, accommodation and food services and company management.
Arts, entertainment and recreation, healthcare and social assistance, and mining reported business contraction in the month.
Canadian building permits decline
OTTAWA, June 5 (UPI) -- There was a 5.2 percent slump in the value of building permits Canadian municipalities issued in April, down to $6.5 billion, Statistics Canada reported.
The decline in intentions followed two consecutive months of increases and the total was dragged down mostly by lower activity in Ontario, the report said.
Ontario's declines were largely in permits for institutional buildings and multi-family dwellings, the agency said.
However, on a national level, industrial construction intentions rebounded 34.7 percent to $554 million, following a 42.4 percent decline in March.
"April's [industrial] gain came from eight provinces, led by Quebec," StatsCan said. "The increase was the result of higher construction intentions … for transportation buildings and manufacturing plants."
As for all types of new residential housing, municipalities approved the construction of 16,484 new dwellings, down 7.3 percent from March.
