Market News
Wall Street closed higher on Wednesday, assessing the ADP jobs report and other economic data, with market participants anticipating a quarter-point rate cut by the Fed. The Nasdaq Composite, the S&P 500 and the Dow all ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.9%, or 408.44 points, to close at 47,882.90. Twenty-two components of the 30-stock index ended in positive territory, seven ended in the negative, and one remained unchanged.
The tech-heavy Nasdaq Composite advanced 0.2% or 40.42 points, to close at 23,454.09. The major gainer of the Nasdaq Composite was Microchip Technology Incorporated MCHP with a 12.2% jump. Microchip currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 0.3% to end at 6,849.72. Out of the 11 broad sectors of the broad-market index, nine ended in positive territory, while two were in negative territory. Energy Select Sector SPDR (XLE), the Financials Select Sector SPDR (XLF) and the Industrials Select Sector SPDR (XLI) rose 1.8%, 1.3% and 1% respectively, while the Technology Select Sector SPDR (XLK) fell 0.4%.
The fear gauge, the CBOE Volatility Index (VIX), decreased by 3.1% to 16.08. A total of 15.44 billion shares were traded on Wednesday, lower than the last 20-session average of 18.19 billion. The S&P 500 posted 27 new 52-week highs and two new lows, and the Nasdaq Composite recorded 108 new highs and 96 new lows.
U.S. Private Hiring Weakens in November
In economic data released on Wednesday, Automatic Data Processing, Inc.’s (ADP) National Employment Report showed that private payrolls decreased by 32,000 in November, lower than the upwardly revised 47,000 in October and less than the consensus estimate of a rise of 40,000.
The small businesses cut their workforce by 120,000 positions, which became the biggest job loss since 2023, and larger businesses added 90,000 new positions. The education and health services sector, together with leisure and hospitality, maintained their hiring activities. However, these positive changes failed to compensate for the job losses in the professional, business services, information, manufacturing, construction and financial activities sectors, which resulted in private employment decreasing.
Market participants are expecting a quarter-point rate decrease in the upcoming Dec.9-10 Fed meeting. This data has made policymakers maintain different opinions about the weakening job market and guarding against persistent inflation.
Economic Data
The Institute for Supply Management survey showed that Services PMI rose to 52.6 in November after falling to 52.4 in October.
The Federal Reserve reported that capacity utilization was 75.9 in September, the same as the revised 75.9 reading for August, which remained unchanged from the initial estimate.
Industrial production for September increased 0.1% against the revised -0.3% for August. The August number was earlier reported at -0.1%.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.6 million barrels for the week ended Nov 28.
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Microchip Technology Incorporated (MCHP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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