Major Averages Fluctuate Before Closing Narrowly Mixed
03 Abril 2024 - 5:26PM
IH Market News
Stocks recovered from an initial move to the downside and spent
most of Wednesday’s trading session in positive territory. Buying
interest waned in the latter part of the session, however, with the
major averages eventually ending the day narrowly mixed.
While the Dow (DOWI:DJI) edged down 43.10 points or 0.1 percent
to 39,127.14, closing lower for the third consecutive session, the
S&P 500 (SPI:SP500) crept up 5.68 points or 0.1 percent to
5,211.49 and the Nasdaq (NASAQI:COMP) rose 37.00 points or 0.2
percent to 16,277.46.
The early turnaround on Wall Street came following the release of a
report from the Institute for Supply Management showing an
unexpected slowdown in the pace of U.S. service sector growth in
the month of March.
The ISM said its services PMI dipped to 51.4 in March from 52.6
in February. While a reading above 50 still indicates growth in the
sector, economists had expected the index to inch up to 52.7.
Notably, the report also showed a substantial slowdown in the
pace of price growth in the sector, with the prices index tumbling
to 53.4 in March from 58.6 in February. The index fell to its
lowest level since March 2020.
The data helped ease recent concerns about the outlook for
interest rates, which contributed to a steep drop by stocks on
Tuesday.
Worries the Federal Reserve may hold off on lowering interest
rates also contributed to the early weakness on Wall Street after
payroll processor ADP released a report this morning showing
stronger than expected private sector job growth in the U.S. in the
month of March.
ADP said private sector employment jumped by 184,000 jobs in
March after climbing by an upwardly revised 155,000 jobs in
February.
Economists had expected private sector employment to increase by
148,000 jobs compared to the addition of 140,000 jobs originally
reported for the previous month.
Meanwhile, Fed Chair Jerome Powell reiterated during remarks at
Stanford University that the central bank is not in a hurry to
begin lowering interest rates.
Powell pointed to higher inflation data over January and
February as a reason for the Fed to be cautious but acknowledged it
is “too soon to say whether the recent readings represent more than
just a bump.”
“We do not expect that it will be appropriate to lower our
policy rate until we have greater confidence that inflation is
moving sustainably down toward 2 percent,” Powell said.
He added, “Given the strength of the economy and progress on
inflation so far, we have time to let the incoming data guide our
decisions on policy.”
The modest lower close by the Dow partly reflected steep drop by
shares of Intel (NASDAQ:INTC), with the semiconductor giant
plunging by 8.2 percent.
Intel came under pressure after disclosing a $7 billion
operating loss by its semiconductor manufacturing business in 2023,
wider than the $5.2 billion operating loss the year before.
Sector News
Gold stocks saw significant strength on the day, driving the
NYSE Arca Gold Bugs Index up by 2.3 percent to its best closing
level in over ten months.
The rally by gold stocks came as the price of the precious metal
jumped to a new record high, with gold for June delivery surging
$33.20 to $2,315 an ounce.
Considerable strength was also visible among computer hardware
stocks, as reflected by the 2.1 percent jump by the NYSE Arca
Computer Hardware Index.
An increase by the price of crude oil also contributed to
notable strength among energy stocks, while housing stocks also
moved to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region moved mostly lower during trading on Wednesday. Japan’s
Nikkei 225 Index slumped by 1.0 percent, while Hong Kong’s Hang
Seng Index tumbled by 1.2 percent.
Meanwhile, the major European markets moved to the upside on the
day. While the German DAX Index climbed by 0.5 percent, the French
CAC 40 Index rose by 0.3 percent and the U.K.’s FTSE 100 Index
closed just above the unchanged line.
In the bond market, treasuries recovered from early weakness to
end the day slightly higher. As a result, the yield on the
benchmark ten-year note, which moves opposite of its price, edged
down by 1.0 basis point to 4.355 percent after reaching a high of
4.429 percent.
Looking Ahead
Reports on weekly jobless claims and the U.S. trade deficit may
attract attention on Thursday, although trading activity is likely
to be somewhat subdued ahead of the release of the more closely
watched monthly jobs report on Friday.
SOURCE: RTTNEWS
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