U.S. stocks started the second half of the year off on a positive note, as the S&P 500 and the narrower, price-weighted Dow Jones Industrial Average gained 0.5% and 0.4%, respectively.
Investors may have been buoyed by two positive data points this morning. The Institute for Supply Management reported that the manufacturing sector expanded last month, following a month of contraction. In addition, the Commerce Department said that construction spending was close to a four-year high in May.
Those data should provide some succor to investors who fear that the Fed’s plan to begin reducing its monthly bond purchases (“quantitative easing”) later this year is premature. Of course, a much more visible gauge of the economy’s strength is scheduled for later this week: Friday’s June employment report.
Consistent with the day’s stock price gains, the CBOE Volatility Index (VIX), Wall Street’s “fear index,” fell 2.9% — the fifth consecutive day during which it has fallen or remained unchanged. (The VIX is calculated from S&P 500 option prices and reflects investor expectations for stock market volatility over the coming 30 days.)
Zynga harvests a new CEO
Out with the old, in with the new! Social game developer Zynga Inc (NASDAQ:ZNGA) is demoting its CEO, the colorful Marc Pinkus, who becomes chief product officer (as an aside, there are simply too many “chiefs” at U.S. companies!). Pincus will remain chairman of the board. As a replacement, Zynga is bringing on Don Mattrick, who was president of Microsoft’s Interactive Entertainment Business, where he was responsible for the Xbox franchise.
This leadership reshuffle is reminiscent of Andrew Mason’s departure from the top of another product of the social networking bubble, Groupon Inc (NASDAQ:GRPN), although the latter lacked the foresight to simultaneously bring in a high-quality replacement. As the following chart, both companies have inflicted similar carnage on their investors, starting on Zynga Inc (NASDAQ:ZNGA)’s first day of trading, Dec. 16, 2011: