Wall Street drifts higher ahead of factory data

US stocks were marginally higher on Monday as investors assessed factory activity data from China and Germany, and ahead of U.S. manufacturing data.

China's official factory data on Sunday showed activity unexpectedly shrank for a third straight month in October, though the contraction was modest.

A private survey showed on Monday that the pace of decline in China's factory activity has slowed, while Germany reported better-than-expected manufacturing activity for October.

Data is expected to show U.S. factory activity fell in October. The Institute for Supply Management's index of U.S. manufacturing activity is expected to have slipped to 50.0 from 50.2 in September. The data is due at 10:00 a.m. ET (1400 GMT).

"We don't really see much of a clear direction this morning," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

At 9:37 a.m. ET, the Dow Jones industrial average was up 54.18 points, or 0.31 percent, at 17,717.72. The S&P 500 was up 6.61 points, or 0.32 percent, at 2,085.97 and the Nasdaq composite index was up 13.18 points, or 0.26 percent, at 5,066.93.

Eight of the 10 major S&P sectors were higher, with the health care sector's 0.67 percent rise leading the advancers. Shares of Abbvie were up 4.3 percent at $62.09, giving the biggest boost to the S&P 500.

"You have a lot of data coming down the pipe this week and you're kind of in a no-man's land, waiting for information," Brown said.

As the U.S. earnings seasons begins to wind down, investors' focus turns to economic data, including Friday's crucial monthly jobs report, for a clearer picture of the state of the economy leading up to the Federal Reserve's meeting in December.

The Fed, which kept rates unchanged at its October meeting, said that it could raise rates in December if the economy proves resilient enough to sustain higher rates.

U.S. stocks ended October on Friday with their strongest monthly performance in four years.

Visa was down about 3.1 percent at $75.14 after offering to buy Visa Europe for as much as $23.34 billion. Visa also reported a lower-than-expected quarterly profit. The stock was the biggest drag on the Dow and the S&P 500.

Shares of Dyax soared 30.8 percent to $36.02 after British drugmaker Shire said it would buy the company for about $5.9 billion. Baxalta, also a takeover target for Shire, fell 2.1 percent to $33.75

Chipotle Mexican Grill dropped 3.8 percent to $615.51 after the restaurant chain operator said on Sunday it had closed all its restaurants in Seattle and Portland due to a reported outbreak of E.coli bacteria.

Fitbit and AIG are scheduled to report results after the close.

Advancing issues outnumbered decliners on the NYSE by 1,603 to 1,062. On the Nasdaq, 1,475 issues rose and 784 fell.

The S&P 500 index showed three new 52-week highs and one new low, while the Nasdaq recorded 22 new highs and 17 new lows.

 

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Savio D'Souza)