After a positive start, stocks gave up their gains and moved along the flat line till around mid afternoon on Wednesday before drifting lower to end the day’s session on a weak note.
The major averages all ended modestly lower. The Dow, which advanced to 36,292.58 in early trades, settled at 36,054.43, losing 70.13 points or 0.19 percent. The S&P 500 ended down 17.84 points or 0.39 percent at 4,549.34, while the Nasdaq closed lower by 83.20 points or 0.58 percent at 14,146.71.
Stocks moved higher earlier in the session, reacting positively 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.
However, stocks retreated as traders chose to lighten commitments due to concerns about possible overbought conditions in the market, and amid caution ahead 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.
Energy stocks shed ground, weighed down by a sharp drop in oil prices amid concerns about the outlook for fuel demand and on data showing a larger than expected increase in gasoline inventory in the week ended December 1st.
Marathon Petroleum, Marathon Oil, Enphase Energy, Constellation Energy, Baker Hughes and Valero Energy lost 2 to 4 percent.
Nvidia, Oracle, American Express, Netflix, Amazon, Intel, J&J, Pfizer, Walmart, Microsoft and JP Morgan ended weak.
Carnival rallied nearly 6 percent. Walgreens Boots Alliance surged about 4.3 percent.
Delta Air Lines, United Airlines Holdings, Southwest Airlines and American Airlines moved up sharply.
Moderna, Citigroup, Starbucks, T-Mobile, Whirlpool, Boeing, Airbnb and Biogen posted strong gains.
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 also moved to the upside on the day. While the German DAX Index surged 0.75 percent, the French CAC 40 climbed 0.66 percent, and the U.K.’s FTSE 100 Index advanced 0.34 percent. The pan European Stoxx 600 ended up 0.52 percent.
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