Markets positive, economic data negative

Markets had a good day on Monday. Bloomberg reports:

U.S. and European stocks rose, erasing all of last week’s losses for the Standard & Poor’s 500 Index, as companies announced $27 billion in global deals after equities traded near their cheapest relative to earnings since 2009. Credit risk fell. The Swiss franc and yen weakened.

The S&P 500 advanced 2.2 percent to 1,204.49 at 4 p.m. in New York after losing 1.7 percent last week. The Stoxx Europe 600 Index added 0.2 percent. The franc depreciated against all 16 of its most-traded peers. The Markit iTraxx SovX Western Europe Index of credit-default swaps insuring the debt of 15 governments fell to the lowest level this month. The 10-year Treasury note yield rose five basis points to 2.30 percent. Oil rallied 2.9 percent.

Economic data for the day, though, were mostly negative.

In Japan, Reuters reports that the economy contracted in the second quarter.

Japan's economy shrank much less than expected in the second quarter as companies made strides in restoring output after the devastating earthquake in March, but a soaring yen and slowing global growth cloud the prospects for a sustained recovery...

Gross domestic product fell 0.3 percent in the second quarter, less than a median forecast for a 0.7 percent contraction and a 0.9 percent decline in January-March.

US data were also negative. Reuters reports:

Manufacturing in the New York area contracted for the third straight month in August, data showed on Monday, tempering any lingering hopes for a rebound in the U.S. economy in the second half of the year...

The New York Federal Reserve's Empire State index showed the general business conditions index fell to minus 7.72 in August from minus 3.76 the month before. Economists polled by Reuters had expected a reading of zero...

Separate data also showed U.S. homebuilder sentiment was unchanged at a low level in August, as a glut of distressed homes, tight credit, and economic uncertainty kept new buyers out of the market.

The NAHB/Wells Fargo Housing Market index held at 15 in August, on target with economists' expectations. It has hovered at historic lows between 14 and 22 since the start of 2008.