ADP jobs report comes in ahead of expectations
The Dow broke above the 22,000 threshold for the first time 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 telecom and consumer-discretionary shares.
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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 4.9% 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 44 points, or 0.2%, to 22,008, with gains powered almost entirely by Apple. Earlier, the average touched an intraday high of 22,036.10. If the blue-chip index ends higher, it would mark its sixth straight closing record.
Opinion:Why Dow 22,000 is not good news for most Americans (http://www.marketwatch.com/story/why-dow-22000-is-not-good-news-for-most-americans-2017-08-02)
The S&P 500 was off by 2 points, or 0.1%, at 2,474, with eight of the 11 primary S&P sectors down on the day. Telecom shares shed 1.5%, real estate shares fell 0.7%, and consumer-discretionary shares fell 0.4%.
The Nasdaq Composite Index declined 6 points, or 0.1%, to 6,357. 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, the rally has left valuations stretched.
"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."
Read: How each Dow stock contributed to the 22,000 milestone (http://www.marketwatch.com/story/how-each-dow-stock-contributed-to-the-22000-milestone-2017-08-02)
Apple has been one of the market's biggest gainers thus far this year, up 36%. 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 often watched for clues to the strength of official employment data, though the correlation between the ADP figures and government data is weak.
Investors are in a holding pattern while they digest the ADP numbers in advance of the Friday jobs report, said Bill Stone, global chief investment strategist at PNC Management Group. Apple is an outlier Wednesday as many investors were expecting the tech giant to have a tough quarter, Stone said.
"Everybody's waiting for Friday for more indication of what the Fed may do," Stone said in an interview. Of particular interest will be average hourly wages, Stone said, because if they rise, it will be an indication that inflation may not be as soft as expected, and support the argument for more tightening from the central bank.
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 11% while Range Resources Corp. (RRC) lost 12%, leading the sector's declines.
Among other movers, Match Group Inc.(MTCH) rose 1.5% 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). Shares of Humana were up 4.9%.
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). Restaurant Brands was down 0.5%.
Illumina Inc.(ILMN) shares jumped more than 14% after the DNA sequencing company reported strong revenue results (http://www.marketwatch.com/story/illumina-shares-rally-as-revenue-tops-street-view-2017-08-01) late Tuesday.
Cardinal Health Inc.(CAH) shares dropped nearly 10% following a downbeat outlook (http://www.marketwatch.com/story/cardinal-health-stock-drops-3-on-downbeat-fiscal-2018-guidance-2017-08-02) for the year, while DaVita Inc.(DVA) shares fell 8% following earnings.
Mondelez International Inc.(MDLZ) topped earnings forecasts and said its CEO Irene Rosenfeld will step down effective November. Shares rose 0.1%.
Time Warner Inc. (TWX) rose 0.1% after its earnings easily beat forecasts.
Shares of Molson Coors Brewing Co. (TAP) gained 1.9% 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 (http://www.marketwatch.com/story/fed-should-keep-to-its-slow-tightening-pace-even-with-tepid-inflation-mester-says-2017-08-02)said the Fed should keep its slow tightening pace even with soft inflation.
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 (http://www.marketwatch.com/story/oil-remains-lower-after-smaller-than-expected-inventory-drop-2017-08-02) rose 0.4% to $49.37 a barrel. Earlier, the Energy Information Administration said that crude-oil inventories fell by 1.5 million barrels in the latest week.
Gold (http://www.marketwatch.com/story/gold-slides-from-a-nearly-8-week-high-even-as-dollar-remains-under-pressure-2017-08-02) settled down $1 at $1,278.40 an ounce, just below a nearly eight-week high.
Asian markets closed mixed (http://www.marketwatch.com/story/asian-markets-get-boost-from-apples-strong-earnings-2017-08-01), while European stocks (http://www.marketwatch.com/story/european-stocks-struggle-as-oil-and-bank-shares-are-dragged-down-2017-08-02) ended the day lower.
--Sara Sjolin in London contributed to this article.
(END) Dow Jones Newswires
August 02, 2017 14:24 ET (18:24 GMT)