U.S. Stocks close mostly higher; Dow pressured by Disney Drop

U.S. stocks closed mostly higher Wednesday, though the Dow industrials were unable to shake off a weak performance by Disney and energy shares, in a choppy day of trading Wednesday as investors digested conflicting U.S. economic data.

The main indexes advanced in early trade after a softer-than-expected reading on private payroll growth stoked ideas the Federal Reserve might not be so hasty about hiking rates.

But a reading of the service sector indicated signs of economic vigor, surging to a 10-year high in July.

Arguably seeing the most volatile trading action was the Dow Jones Industrial Average DJIA, -0.06% which flipped between gains and losses in afternoon trade. Earlier in the session, the blue-chip index had been up nearly 111 points and down nearly 58 points. The index closed down 10.22 points at 17,540.47.

Shares of Walt Disney Co. DIS, -9.17% which were down 9%, helped drag the Dow lower. The media giant reported weaker-than-expected revenue because of slower TV network and parks growth late Tuesday.

The S&P 500 SPX, +0.31% finished up 6.52 points, or 0.3%, at 2,099.84, after rising around 19 points earlier. The Nasdaq Composite COMP, +0.67% advanced 34.40 points, or 0.7%, to close at 5,139.94, after being up nearly 70 points earlier.

Stocks jumped early in the session after Automatic Data Processing Inc.’s July private-sector jobs report showed employers added 185,000 jobs in July, a slowdown from the 229,000 added in June. Economists and traders look to the data for clues to the Labor Department’s jobs report, though it isn’t necessarily a strong guide.

“Investors reacted to the ADP report in a knee-jerk fashion,” said Paul Nolte, portfolio manager at Kingsview Asset Management, of the early bump in stocks.

But now, they’re reassessing what a weak employment report can mean for the economy. While weak job figures may delay a Fed rate hike, it also calls into question as to whether the economy is really growing, Nolte said.

Adding more fodder for those hoping for ultraloose monetary policy to stay in place for longer were comments from Federal Reserve Gov. Jerome Powell, in an interview with CNBC, who said he was undecided about whether to support a rate hike when policy makers next meet in mid-September.

Powell’s remarks came after two Fed regional bank presidents have come out in favor of a September hike earlier this week, including Dennis Lockhart, the president of the Atlanta Fed, who told The Wall Street Journal on Tuesday that it would take major weakness to convince him not to support a September rate hike.

Source: Market watch