Benchmarks finished at record level on Wednesday as the services sector posted strong growth in September. The ISM Services index hit record high since Aug 2005, hinting at broadly encouraging economic conditions. Meanwhile, the private sector added lesser number of jobs to the U.S. economy in the last month primarily due to losses for small-business sector in the wake of two devastating hurricanes that ravaged swathes of Texas and Florida last month.
The Dow Jones Industrial Average (DJIA) closed at 22,661.57, gaining 0.1%. The S&P 500 Index (INX) increased 0.1% to close at 2,537.74. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,534.63, increasing 0.1%. A total of 5.8 billion shares were traded on Wednesday, lower than the last 20-session average of 6.3 billion shares. Declining issues outnumbered advancers on the NYSE by 1.05-to-1 ratio. On the Nasdaq, decliners outnumbered advancers by 1.01-to-1 ratio. The CBOE VIX decreased 0.4% to close at 9.47.
Benchmarks Continue Breaching Records
Dow continued its stellar showing on Wednesday and posted gains for sixth straight session. The blue-chip index amassed almost 20 points to close at a record high. Such a run was supported by gains from 3M (MMM - Free Report) , UnitedHealth (UNH - Free Report) , Nike (NKE - Free Report) and Caterpillar (CAT - Free Report) , shares of which surged 0.9%, 0.9%, 1.2% and 1%, respectively.
The S&P 500 gained a meager 3.2 points but advanced its streak of gains to seven days on the trot — the longest since May. Of the 11 major sectors of the S&P 500, 7 ended in the positive territory with utilities leading the advancers followed by real estate.
Meanwhile, the Nasdaq added almost 3 points to end in the green. However, gains for the index were pared by a slump in the technology sector after shares of Apple (AAPL - Free Report) declined 0.7%. The Compnay possesses a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ISM Services Index Notches Up a Record High
ISM Services Index in September came in at 59.8%, surpassing the consensus estimate of 55.5%. This also marked its highest level since Aug 2005 when the index logged a reading 61.3%. The report from ISM also stated that non-manufacturing sector showed strong growth despite hurricanes Harvey and Irma ravaging swathes of Texas and Florida. This augurs well for the economy. Of the 17 non-manufacturing sectors which were surveyed, 14 depicted growth in the last month. Three of the industries which lagged behind included educational services, mining and agriculture, and forestry, fishing and hunting.
Furthermore, business activity also surged almost 4 percentage points in the month of September, posting growth for 98 months on the trot. Meanwhile, new orders index also increased to 63% in September from 57.1% in August. Also, the employment index grew to 56.8% in the month.
Job Additions in the Private Sector Suffer
Despite increasing, the number of new job additions in September came in lower than last month’s figure. According to the latest report by ADP, there were a total of 135,000 — hitting an 11 month low since October 2016 — jobs that were added by the private sector to the economy. Economists had expected that the service sector would add about 140,000 jobs. Comparatively, the number of job additions in August was 237,000, revised later to 228,000.
Economists attributed lower number of job additions in September to small-business sector losing jobs in the wake of hurricanes Harvey and Irma. However, it should be noted that medium and large businesses reported higher number of addition in jobs in September, with manufacturing sector gaining as many as 18,000 jobs.
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