ADP jobs report comes in ahead of expectations
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The Dow broke above the 22,000 threshold for the first time ever on Wednesday, putting the blue-chip index on track for its seventh straight daily rise even as the broader market pulled back on weakness in energy shares.
Major indexes opened higher a day after Apple Inc.(AAPL) posted stronger-than-expected quarterly earnings (http://www.marketwatch.com/story/apple-shares-soar-as-fiscal-third-quarter-earnings-beat-expectations-2017-08-01) and iPhone sales that met expectations. Its stock rose 4.3% and hit a record in its biggest one-day percentage rise since February.
The tech giant is the market's largest stock by market value, which means it has an outsize weight on the overall moves of all three major indexes.
The Dow Jones Industrial Average rose 20 points, or 0.1%, to 21,983. If the blue-chip index ends higher, it would mark its sixth straight closing record.
The gains in the Dow were due almost entirely to Apple, which lifted the tech sector by 0.1%. Shares were broadly lower, with eight of the 11 primary S&P sectors down on the day. Energy was a particular loser, off 0.9%.
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That weakness spilled into the broader market. The S&P 500 was off by 6 points, or 0.3%, at 2,470. The Nasdaq Composite Index lost 23 points, or 0.4%, to 6,340. The tech-heavy Nasdaq had previously risen as much as 0.5% on the day.
Read:Apple's earnings-driven gain puts the Dow on pace to top 22,000 (http://www.marketwatch.com/story/apples-earnings-driven-gain-puts-the-dow-on-pace-to-top-22000-2017-08-02)
Wall Street remains solidly higher for 2017, with major indexes having hit a series of records. However, those gains have raised some concerns about valuations.
"People are saying the move has been overdone, but they've been saying that for a while," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. "Valuations do look stretched relative to historical norms, but investors are looking a little farther out, and valuations don't look that bad in that context."
"Overall, earnings have been coming in good this season, with stocks beating on revenue and profits," Jacobsen said. "The fact that the market is still reacting to that in a positive way tells me that stocks aren't in a bubble, that there's fundamental support."
Apple has been one of the market's biggest gainers thus far this year, up 38%. The results could provide support to the idea that technology stock valuations are justified by their levels of growth.
Read: A quarter of S&P 500's 2017 climb due to five stocks (yes, those five) (http://www.marketwatch.com/story/a-quarter-of-sp-500s-2017-climb-due-to-five-stocks-yes-those-five-2017-07-27)
Don't miss:One giant reason why tech bubble talk may simply be overblown (http://www.marketwatch.com/story/one-giant-reason-why-tech-bubble-talk-may-simply-be-overblown-2017-08-02)
Adding to the positive tone on the day, private sector hiring remained strong in July (http://www.marketwatch.com/story/private-sector-continues-to-see-strong-job-gains-in-july-adp-says-2017-08-02)as employers added 178,000 jobs in the month, more than had been expected, according to ADP. The report is sometimes seen as a positive sign ahead of the closely watched payrolls report, which will be released on Friday.
"This is not a sign of an economy that's rolling over. This is a sign of an economy that's starting to accelerate," Jacobsen said.
Read:Apple's earnings have Wall Street learning to 'stop worrying and love the super cycle' (http://www.marketwatch.com/story/apples-earnings-have-wall-street-learning-to-stop-worrying-and-love-the-super-cycle-2017-08-02)
In the energy sector, Pioneer Natural Resources Co. (PXD) sank 15% while Range Resources Corp. (RRC) lost 11%, leading the sector's declines.
Among other movers, Match Group Inc.(MTCH) rose 2.4% after the online dating company late Tuesday turned in earnings that fell short of forecasts (http://www.marketwatch.com/story/match-group-shares-slip-after-earnings-miss-announced-leadership-shuffle-2017-08-01) but also announced a new chief executive.
Health-plan administrator Humana Inc.(HUM) reported earnings that beat forecasts and lifted its full-year outlook (http://www.marketwatch.com/story/humana-beats-profit-expectatons-and-lifts-outlook-but-revenue-falls-shy-2017-08-02), while Burger King-parent Restaurant Brands International Inc.(QSR) missed profit forecasts (http://www.marketwatch.com/story/burger-king-parent-restaurant-brands-misses-profit-revenue-estimates-2017-08-02). Shares of Humana were up 4.5% while Restaurant Brands was down 0.1%.
Mondelez International Inc.(MDLZ) topped earnings forecasts and said its CEO Irene Rosenfeld will step down effective November. Shares fell 0.7%.
Time Warner Inc. (TWX) rose 0.1% after its earnings easily beat forecasts.
Shares of Molson Coors Brewing Co. (TAP) gained 4.6% after its results.
And after the market closes, Tesla Inc.(TSLA), Fitbit Inc.(FIT) and American International Group Inc.(AIG) are among major companies slated to report.
Read:Tesla earnings -- Will Model 3 live up to the hype? (http://www.marketwatch.com/story/tesla-earnings-will-model-3-live-up-to-the-hype-2017-07-27)
Opinion:U.S. economy needs to create 4.4 million more jobs (http://www.marketwatch.com/story/economy-needs-to-create-44-million-more-jobs-2017-07-31)
In Federal Reserve news, Cleveland Fed President Loretta Mester will give a speech on the economic outlook at the Community Bankers Association of Ohio's annual convention in Cincinnati Ohio at 11 a.m. Eastern.
San Francisco Fed president John Williams will talk about monetary policy in Las Vegas, Nev., at 3:30 p.m. Eastern.
Other markets: Oil prices fell 0.2% after the Energy Information Administration said that crude-oil inventories fell by 1.5 million barrels in the latest week.
Gold dropped 0.5% to $1,272.60 an ounce.
Asian markets closed mixed (http://www.marketwatch.com/story/asian-markets-get-boost-from-apples-strong-earnings-2017-08-01), European stocks traded mostly lower.
(END) Dow Jones Newswires
August 02, 2017 11:01 ET (15:01 GMT)