U.S. Stocks Rise On Upbeat Jobs Data
U.S. stocks closed higher Wednesday in advance of the Independence Day holiday, as positive jobs data countered international concerns in the abbreviated trading session.
The Dow Jones Industrial Average rose 56.14 points, or 0.4%, to close at 14,988.55, with shares of Boeing Co. and Cisco Systems Inc. leading the way. Earlier in the session, the Dow was down by as many as 73 points.
Shares of Alcoa Inc. fell 1.2%, the worst performer on the index after a downgrade from J.P. Morgan analysts. The aluminum giant will kick off second-quarter earnings season on Monday after the bell.
The S&P 500 advanced 1.33 points, or less than 0.1%, to finish at 1,615.41, overcoming an earlier 9-point deficit, with tech and consumer discretionary stocks performing the best.
The Nasdaq Composite finished up 10.27 points, or 0.3%, at 3,443.67, as Apple Inc. gained 0.6%. Earlier in the session, the Nasdaq had been down by as many as 15 points.
Advancing stocks edged out declining stocks by about 13 to 10 on the Nasdaq while decliners outnumbered advancers on the New York Stock Exchange by about 3 to 2. Composite NYSE volume topped 1.9 billion shares and composite Nasdaq volume was just over 925 million shares by the 1 p.m. Eastern close.
On the jobs front, ADP’s private-sector report showed a better-than-expected gain of 188,000 jobs in June. Initial weekly jobless claims showed a surprise drop, with the Labor Department saying claims fell from the prior week to 343,000.
The jobless-claims report usually comes out on Thursdays, but that’s changed this week due to the Independence Day holiday.
The data are a good indication of what may be in store for Friday’s job report, said Mark Luschini, chief investment strategist at Janney Montgomery Scott. However, trading on Friday’s report may not come to bear until Monday given the number of traders on holiday this week, he noted. “It’s taken out the probability that we’ll get a downside shock,” Luschini said.
Economists polled by MarketWatch expect the U.S. added 155,000 jobs in June.
Investors on Wednesday also were digesting a report showing the U.S. trade deficit widened more than expected in May, and a weaker-than-anticipated reading on the services sector. The Institute for Supply Management’s nonmanufacturing index fell to 52.2% in May, indicating slower growth among service-sector companies.
Internationally, investors are concerned about a potential collapse for Portugal’s government after the exit of two cabinet members. The country’s government previously had agreed on an austerity plan under an international bailout.
“Expect the government to fall in the course of the next 48 hours. A new election will be called amid a huge drive towards antiausterity,” said Steen Jakobsen, chief economist with Saxo Bank, in emailed comments. “This is exactly what German Chancellor Angela Merkel does not need.”
European stocks dropped on Wednesday, with the Stoxx Europe 600 index sliding 0.6%.
In Egypt, President Mohammed Morsi proposed a consensus government as a military deadline urging him to meet protesters’ demands passed. The crisis turned deadly Tuesday night, with at least 18 people killed in fighting between Morsi’s supporters and his opponents.
Oil prices jumped on the headlines out of Egypt, which is an important crude transport point. U.S. oil futures traded above $102 a barrel, but were recently back below that level.
In Asia on Wednesday, stocks fell as two reports on China’s services sector indicated weak growth for June. Hong Kong’s Hang Seng Index lost 2.5%.
“It looks as if we could be headed for another summertime crisis in the euro zone, as Portugal’s government crumbles and bond yields spike,” said David Madden, market analyst at IG, in a note to investors.
Source : Marketwatch
