Published October 03, 2012
FOX Business: The Power to Prosper
U.S. stocks traded flat to slightly higher Wednesday afternoon as the bulls struggle to post a meaningful rally even after stronger-than-expected reports on private-sector job growth and service-sector activity in September.
As of 2:54 p.m. ET, the Dow Jones Industrial Average rose 0.96 points, or 0.01%, to 13483.17, the S&P 500 advanced 3.58 points, or 0.25%, to 1449.34 and the Nasdaq Composite jumped 11.52 points, or 0.37%, to 3131.51. The FOX 50 picked up 3.92 points, or 0.36%, to 1095.13.
Offsetting some of the enthusiasm for the economic data, the energy sector retreated amid a $4 plunge for crude oil below the $89 a barrel level.
The back-and-forth trading comes after the markets ended with a mixed picture in each of the first two days this week but as Wall Street's attention shifts from Europe to the U.S. labor market amid a slew of key economic reports.
Most of the Dow's 30 members gained ground, led by Bank of America (BAC) and Walt Disney (DIS). The index's biggest laggards were Chevron (CVX) and Hewlett-Packard (HPQ), which plummeted 11% to 2003 lows on a gloomy guidance.
Stocks hit session lows on Wednesday even after the Institute for Supply Management's gauge of service-sector activity rose to a six-month high of 55.1 in September from 53.7 in August, suggesting the sector is expanding at a faster rate. Economists had expected expansion would slow to 53.1. A reading above 50 indicates expansion.
“Today’s report reinforces the resiliency of the U.S. economy in the face of considerable headwinds and uncertainty,” Dan Greenhaus, chief global strategist at BTIG, wrote in a note.
Earlier Wall Street responded favorably to ADP's private sector labor report, which revealed the U.S. private sector created 162,000 jobs in September, besting forecasts from economists for 143,000. However, ADP trimmed its August job growth estimate down to 189,000 jobs from 201,000.
The ADP data serve as a preview for Friday's more closely watched government jobs report, which is forecasted to reveal nonfarm payroll growth rose to 115,000 last month from 96,000 the month before.
However, the energy sector declined about 1%, with individual names like Valero (VLO) seeing even deeper losses as crude oil tumbled below $89 a barrel despite the economic data. Crude tumbled to session lows after new data showed crude stockpiles declined last week, but gasoline inventories unexpectedly climbed.
Crude tumbled $3.75 a barrel, or 4.08%, to $88.14. Gold added $4.60 a troy ounce, or 0.26%, to $1,777.30.
U.S. markets have finished mixed in each of the previous two sessions, giving up early gains amid continued concerns about the timing of a potential bailout request from Spain. Wall Street came under pressure Tuesday after Spanish Prime Minister Mariano Rajoy said a rescue request is not imminent.
MetroPCS (PCS) approved a combination with Deutsche Telekom's T-Mobile USA unit in a deal that marries the No. 4 and No. 5 U.S. wireless providers. MetroPCS shareholders will receive $1.5 billion in cash and a 24% stake of the new entity, while Deutsche Telekom will hold 74%.
Hewlett-Packard (HPQ) tumbled about 11% after projecting full-year non-GAAP EPS of $3.40 to $3.60, compared with the Street's view of $4.18. H-P, holding its analyst day, said it sees all segments except software to suffer declining revenue.
Monsanto (MON) slumped about 1.5% after the world's largest seed giant disclosed a deeper-than-expected quarterly loss and a cautious outlook for fiscal 2013.
Best Buy (BBY) founder Richard Schulze and at least four private-equity firms are moving forward with due diligence for a potential $11 billion takeover of the electronics retailer, Reuters reported. The PE firms include Apollo Global Management, Cerberus Capital Management and TPG Capital.
Family Dollar (FDO) met expectations with a 1.4% rise in fiscal fourth-quarter earnings amid a 5.4% gain in same-store sales. The discounter's fiscal 2013 guidance exceeded expectations.
The Euro Stoxx 50 dipped 0.04% to 2492.48, London’s FTSE 100 gained 0.28% to 5825.81 and the German DAX added 0.22% to 7322.08.
In Asia, Japan’s Nikkei 225 slid 0.45% to 8746.87 and Hong Kong's Hang Seng returned from a two-day break by advancing 0.23% to 20888.28.