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Wall Street closed slightly lower on Wednesday, ending a two-day rally. The latest employment numbers showed that employers had stepped up on hiring, leading to the inference that the Fed would stay on course with its aggressive rate hikes. An important Fed official reiterated the central bank’s commitment to bring inflation down. All three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.1% or 42.45 points to close at 30,273.87. Notably, 18 components of the 30-stock index ended in the red, while 11 ended in the green and one remained unchanged.
The tech-heavy Nasdaq Composite finished at 11,148.64, declining 0.3% or 27.77 points.
The S&P 500 lost 0.2%, or 7.65 points to end at 3,783.28. Eight of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Real Estate Select Sector SPDR (XLRE) and the Materials Select Sector SPDR (XLB) fell 2.2%, 1.9% and 1.1%, respectively, while the Energy Select Sector SPDR (XLE) advanced 2.1%.
The fear-gauge CBOE Volatility Index (VIX) was down 1.8% to 28.55. A total of 10.4 billion shares were traded on Wednesday, lower than the last 20-session average of 11.6 billion. Decliners outnumbered advancers on the NYSE by a 2.08-to-1 ratio. On Nasdaq, a 1.69-to-1 ratio favored declining issues.
Hawkish Comments From Fed Officials Continue to Pour in
On Wednesday, in an interview given to Bloomberg, San Francisco Fed President Mary Daly stressed upon the central bank's commitment to curb inflation with more interest rate hikes.
"We definitely don't raise rates until something breaks; we actually are forward-looking," Daly said, adding, “Right now, the economy is working well, and so are markets. We always have the lender-of-last-resort responsibilities, and if market dislocation should come about then we would be prepared to use that, but that's not what I'm seeing right now," she said.
A fourth consecutive 75 bps interest rate hike is expected from the Fed when it meets in November.
ADP Report Shows Hiring Gathered Pace
Automatic Data Processing (ADP - Free Report) released its National Employment Report on Wednesday, which showed that hiring in the private sector had picked up pace in September. At 208,000, the hiring number came in beyond expectations and significantly higher than the upwardly revised 185,000 from August. The tight job market saw another month of sizeable pay hikes, with annual pay increasing 7.8% year over year.
Coming in immediately after the JOLTS report which had led investors to ponder on whether the Fed would take cognizance of the jobs market slowing down, the ADP report emboldens the impression that the Fed would stay on its course for further aggressive policy tightening. Treasury yields also rose after two days of decline, indicating that the bond market was expecting the Fed to remain hawkish. Stocks slid in a choppy session as utilities and real estate were hit particularly hard.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced Wednesday that trade deficit was $67.4 billion in August, down $3.1 billion from the revised figure of $70.5 billion in July.
The Institute for Supply Management (ISM) reported that in September, the Services PMI came in at 56.7%. This is higher than the consensus of 56 for the period. The August reading was 56.9%.
For the week ending Sep 30, 2022, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.4 million barrels from the previous week.
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Stock Market News for Oct 6, 2022
Wall Street closed slightly lower on Wednesday, ending a two-day rally. The latest employment numbers showed that employers had stepped up on hiring, leading to the inference that the Fed would stay on course with its aggressive rate hikes. An important Fed official reiterated the central bank’s commitment to bring inflation down. All three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.1% or 42.45 points to close at 30,273.87. Notably, 18 components of the 30-stock index ended in the red, while 11 ended in the green and one remained unchanged.
The tech-heavy Nasdaq Composite finished at 11,148.64, declining 0.3% or 27.77 points.
The S&P 500 lost 0.2%, or 7.65 points to end at 3,783.28. Eight of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Real Estate Select Sector SPDR (XLRE) and the Materials Select Sector SPDR (XLB) fell 2.2%, 1.9% and 1.1%, respectively, while the Energy Select Sector SPDR (XLE) advanced 2.1%.
The fear-gauge CBOE Volatility Index (VIX) was down 1.8% to 28.55. A total of 10.4 billion shares were traded on Wednesday, lower than the last 20-session average of 11.6 billion. Decliners outnumbered advancers on the NYSE by a 2.08-to-1 ratio. On Nasdaq, a 1.69-to-1 ratio favored declining issues.
Hawkish Comments From Fed Officials Continue to Pour in
On Wednesday, in an interview given to Bloomberg, San Francisco Fed President Mary Daly stressed upon the central bank's commitment to curb inflation with more interest rate hikes.
"We definitely don't raise rates until something breaks; we actually are forward-looking," Daly said, adding, “Right now, the economy is working well, and so are markets. We always have the lender-of-last-resort responsibilities, and if market dislocation should come about then we would be prepared to use that, but that's not what I'm seeing right now," she said.
A fourth consecutive 75 bps interest rate hike is expected from the Fed when it meets in November.
ADP Report Shows Hiring Gathered Pace
Automatic Data Processing (ADP - Free Report) released its National Employment Report on Wednesday, which showed that hiring in the private sector had picked up pace in September. At 208,000, the hiring number came in beyond expectations and significantly higher than the upwardly revised 185,000 from August. The tight job market saw another month of sizeable pay hikes, with annual pay increasing 7.8% year over year.
Coming in immediately after the JOLTS report which had led investors to ponder on whether the Fed would take cognizance of the jobs market slowing down, the ADP report emboldens the impression that the Fed would stay on its course for further aggressive policy tightening. Treasury yields also rose after two days of decline, indicating that the bond market was expecting the Fed to remain hawkish. Stocks slid in a choppy session as utilities and real estate were hit particularly hard.
Consequently, shares of Essex Property Trust, Inc. (ESS - Free Report) and American Electric Power Company, Inc. (AEP - Free Report) declined 3.7% and 3.3%, respectively. Essex Property carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced Wednesday that trade deficit was $67.4 billion in August, down $3.1 billion from the revised figure of $70.5 billion in July.
The Institute for Supply Management (ISM) reported that in September, the Services PMI came in at 56.7%. This is higher than the consensus of 56 for the period. The August reading was 56.9%.
For the week ending Sep 30, 2022, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.4 million barrels from the previous week.