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U.S. stocks ended mostly lower on Wednesday, with the Nasdaq extending its losing streak to the third straight day as a batch of economic data raised concerns that Fed’s aggressive interest rate high stance might push the economy into a recession. The S&P 500 also closed in the red. However, the Dow ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1% or 80.34 points to finish at 33,482.72 points.
The S&P 500 lost 0.3% or 10.22 points to close at 4,090.38 points. Consumer discretionary, tech and industrial stocks were the biggest losers.
The Technology Select Sector SPDR (XLK) dipped 1.1%, while the Industrials Select Sector SPDR (XLI) lost 1.3%. The Consumer Discretionary Sector SPDR (XLY) declined 2.1%. Seven of the 11 sectors of the benchmark index finished in negative territory.
The tech-heavy Nasdaq slid 1.1% or 129.47 points to end at 11,996.86 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.42% to 19.08. A total of 10.1 billion shares were traded on Wednesday, lower than the last 20-session average of 12.68 billion.
Investors Concerned About Economy’s Future
The rally over the past two weeks came to a halt this week as weak economic data raised concerns about the nation’s weakening economy. Investors are unable to decide whether to cheer the weak economic data or be concerned about the negative effects those trends indicate.
On Wednesday, Automatic Data Processing, Inc. ((ADP - Free Report) ) announced the private payroll numbers for March, which came in well below the consensus estimates. Private sector employers added 145,000 jobs in March, which came in below economists’ expectations of 210,000.
Also, the Institute for Supply Management’s services index moved southward to a three-month low, which indicated slowing growth as pressure continues to escalate on the economy.
Wednesday’s data follows the job openings report released on Tuesday, which suggested that the Fed’s tryst to cool the resilient labor market might finally be bearing fruit. In February, job openings fell below 10 billion for the first time since 2021.
The Fed’s aggressive interest rate hike policy in its bid to bring down soaring inflation finally seems to be taking effect but weak economic data is now growing evidence of the economy might slip into a recession.
According to Dow Jones Market Data, the 2-year Treasury yield, which is particularly sensitive to expectations regarding monetary policy, dropped to 3.831% on Wednesday, hitting its lowest level since Sep 13. In early March, the 2-year Treasury yield had surpassed 5% and reached its highest level since 2007.
The tech-heavy Nasdaq took a massive hit this week after a solid first quarter that ended last Friday. Wednesday was no different. Tech and chip stocks were the worst performers. Shares of Zscaler, Inc. ((ZS - Free Report) ) tumbled 8.3%, while CrowdStrike Holdings, Inc. ((CRWD - Free Report) ) fell 6.6%. Zscaler has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Among chip stocks, NVIDIA Corporation ((NVDA - Free Report) ) lost 2.1%, while Advanced Micro Devices, Inc. ((AMD - Free Report) ) declined 3.5%.
Investors will get a clearer picture of how the Fed’s aggressive monetary policy will impact the economy in the coming days. Market participants are now waiting for the March jobs report, which will be out later this week. The jobs report is scheduled to be released on Good Friday when Wall Street will be closed.
Economic Data
The Institute for Supply Management’s service sector activity index declined to 51.2% in March to a three-month low. Although a reading above 50 indicates expansion, the steep decline in services activity hinted at a weakening economy.
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Stock Market News for Apr 6, 2023
U.S. stocks ended mostly lower on Wednesday, with the Nasdaq extending its losing streak to the third straight day as a batch of economic data raised concerns that Fed’s aggressive interest rate high stance might push the economy into a recession. The S&P 500 also closed in the red. However, the Dow ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1% or 80.34 points to finish at 33,482.72 points.
The S&P 500 lost 0.3% or 10.22 points to close at 4,090.38 points. Consumer discretionary, tech and industrial stocks were the biggest losers.
The Technology Select Sector SPDR (XLK) dipped 1.1%, while the Industrials Select Sector SPDR (XLI) lost 1.3%. The Consumer Discretionary Sector SPDR (XLY) declined 2.1%. Seven of the 11 sectors of the benchmark index finished in negative territory.
The tech-heavy Nasdaq slid 1.1% or 129.47 points to end at 11,996.86 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.42% to 19.08. A total of 10.1 billion shares were traded on Wednesday, lower than the last 20-session average of 12.68 billion.
Investors Concerned About Economy’s Future
The rally over the past two weeks came to a halt this week as weak economic data raised concerns about the nation’s weakening economy. Investors are unable to decide whether to cheer the weak economic data or be concerned about the negative effects those trends indicate.
On Wednesday, Automatic Data Processing, Inc. ((ADP - Free Report) ) announced the private payroll numbers for March, which came in well below the consensus estimates. Private sector employers added 145,000 jobs in March, which came in below economists’ expectations of 210,000.
Also, the Institute for Supply Management’s services index moved southward to a three-month low, which indicated slowing growth as pressure continues to escalate on the economy.
Wednesday’s data follows the job openings report released on Tuesday, which suggested that the Fed’s tryst to cool the resilient labor market might finally be bearing fruit. In February, job openings fell below 10 billion for the first time since 2021.
The Fed’s aggressive interest rate hike policy in its bid to bring down soaring inflation finally seems to be taking effect but weak economic data is now growing evidence of the economy might slip into a recession.
According to Dow Jones Market Data, the 2-year Treasury yield, which is particularly sensitive to expectations regarding monetary policy, dropped to 3.831% on Wednesday, hitting its lowest level since Sep 13. In early March, the 2-year Treasury yield had surpassed 5% and reached its highest level since 2007.
The tech-heavy Nasdaq took a massive hit this week after a solid first quarter that ended last Friday. Wednesday was no different. Tech and chip stocks were the worst performers. Shares of Zscaler, Inc. ((ZS - Free Report) ) tumbled 8.3%, while CrowdStrike Holdings, Inc. ((CRWD - Free Report) ) fell 6.6%. Zscaler has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Among chip stocks, NVIDIA Corporation ((NVDA - Free Report) ) lost 2.1%, while Advanced Micro Devices, Inc. ((AMD - Free Report) ) declined 3.5%.
Investors will get a clearer picture of how the Fed’s aggressive monetary policy will impact the economy in the coming days. Market participants are now waiting for the March jobs report, which will be out later this week. The jobs report is scheduled to be released on Good Friday when Wall Street will be closed.
Economic Data
The Institute for Supply Management’s service sector activity index declined to 51.2% in March to a three-month low. Although a reading above 50 indicates expansion, the steep decline in services activity hinted at a weakening economy.