U.S. Stocks Little Changed As Early Buying Interest Evaporates

After moving to the upside early in the session, stocks have given back ground over the course of the trading day on Wednesday. The major averages have pulled back well off their highs of the session and are currently nearly unchanged.

While the Dow is up 7.94 points or less than a tenth of a percent after reaching its best intraday level in almost two years, the Nasdaq is down 1.80 points or less than a tenth of a percent at 14,228.11 and the S&P 500 is down 1.41 points or less than a tenth of a percent at 4,565.77.

The early strength on Wall Street reflected a positive reaction to a report from payroll processor ADP showing private sector employment in the U.S. increased by less than expected in the month of November.

ADP said private sector employment rose by 103,000 jobs in November after climbing by a downwardly revised 106,000 jobs in October.

Economists had expected private sector employment to advance by 130,000 jobs compared to the addition of 113,000 jobs originally reported for the previous month.

“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” said ADP chief economist Nela Richardson. “But that boost is behind us.”

She added, “The return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”

The weaker than expected private sector job growth added to recent optimism the Federal Reserve is done raising interest rates.

Buying interest has waned over the course of the session, however, as traders express concerns expectations the Fed could pivot to cutting rates as early as March 2024 has led to overbought conditions.

Traders may also be reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

Economists currently expect employment to increase by 185,000 jobs in November after rising by 150,000 jobs in October, while the unemployment rate is expected to hold at 3.9 percent.

Sector News

Despite the pullback by the broader markets, airline stocks continue to see substantial strength, with the NSYE Arca Airline Index soaring by 3.1 percent to its best intraday level in almost four months.

Significant strength also remains visible among housing stocks, as reflected by the 1.8 percent gain being posted by the Philadelphia Housing Sector Index.

Financial, biotechnology and networking stocks are also seeing notable strength, while energy stocks have come under pressure amid a steep drop by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index surged by 2.0 percent, while Hong Kong’s Hang Seng Index climbed by 0.8 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has jumped by 0.9 percent, the French CAC 40 Index is up by 0.8 percent and the U.K.’s FTSE 100 Index is up by 0.5 percent.

In the bond market, treasuries are extending the rally seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.5 basis points at 4.136 percent.

Source: Read Full Article