Industrials Lift the Dow, But Banks Lag Behind
FOX Business: The Power to Prosper
Industrial shares paved the way higher on Wednesday, but a retreat by big-name banks capped the gains for the blue chips.
The Dow Jones Industrial Average gained 56.2 points, or 0.45%, to 12,626, the S&P 500 rose 1.3 points, or 0.1%, to 1,339 and the Nasdaq Composite climbed 8.3 points, or 0.29%, to 2,834. The FOX 50 was up 0.71 point to 938.
Caterpillar (NYSE:CAT), the world's biggest heavy machinery maker, and DuPont (NYSE:DP) were among the best performing blue chips on the day. However, Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) counterbalanced the gains amid concerns over exposure to the euro zone sovereign debt crisis.
Trading in the first two days following the holiday weekend has been light; indeed, Tuesday's volume was the second-lowest this year.
The services sector continued expanding in June, according to The Institute for Supply Management's Non-Manufacturing PMI index. The gauge edged lower to 53.3 in June from 54.6 the prior month, slightly shy of estimates of 54 for the month. Readings above 50 indicate expansion, while readings below 50 indicate contraction.
Private sector job cuts rose 11.6% to 41,432 in June, according to Challenger, Gray & Christmas. However, despite the monthly increase, layoffs in the first half of the year were the lowest since 2000.
The highly-anticipated monthly employment report from the Labor Department is slated for release on Friday. Economists expect the economy to have added 94,000 job in June and the unemployment rate to have held steady at 9.1%.
Just a week after Greece's Parliament took the austerity measures necessary to achieve a fresh rescue from the European Union and International Monetary Fund, concerns about the stability of several euro zone members have come back into focus.
Moody's Investor Service issued a report on Tuesday, saying the country faces "formidable challenges" cuttings its spending and increasing taxes, which was a requirement of its recent bailout from the EU and IMF. The ratings company also said there is a heightened risk Portugal won't be able to borrow from capital markets, meaning it could need yet another bailout.
"Moodys downgrade on Portuguese debt ... sent the euro zone and specifically some of its banks shuffling back towards the abyss," wrote Ben Critchley, a sales trader, IG Index, a London-based trading firm, in a note.
The euro fell 0.75% against the U.S. dollar, snapping a six-day winning steak, on Tuesday, and has fallen another 0.81% on Wednesday. The greenback climbed 0.67% against a basket of world currencies.
China hiked its interest rates for the third time this year as it struggles with inflation that is the highest in three years. However, increased interest rates can also slow down the pace of economic expansion, posing a tough situation for one of the world's largest economies.
Energy markets were mixed after tacking on gains in the previous session.
Light, sweet crude fell 24 cents, or 0.25%, to $96.65 a barrel. Still, crude is only a few cents off of its two-week high.
Wholesale RBOB gasoline gained 2 cents, or 0.68%, to $3.00 a gallon. Meanwhile, consumer gasoline prices climbed by a penny overnight. A gallon of regular gasoline costs $3.57 on average nationwide, down from $3.77 last month, but well above the $2.72 drivers paid last year, according to the AAA Fuel Gauge Report.
In metals, gold rose $16.50, or 1.1%, to $1,529 a troy ounce. Silver jumped 51 cents, or 1.4%, to $35.92 a troy ounce.
Walgreen's (NYSE:WAG) same-store sales increased by 4.8% in June, topping estimates of 2.9%.
Berkshire Hathaway is part of a consortium bidding on Citigroup's (NYSE:C) consumer-lending business, according to The Wall Street Journal.
Apple (NYSE:AAPL) is set to launch the next iteration of its popular iPhone during the third quarter, according to a report by Dow Jones Newswires. The new phone is set to include an 8 megapixel camera and a wireless chipset made by Qualcomm, the report said.
Microsoft's (NYSE:MSFT) Skype will power Facebook's new video chat service, unveiled on Wednesday.
The English FTSE 100 fell 0.63% to 6,003, the French CAC 40 slid 0.44% to 3,961 and the German DAX dipped 0.11% to 7,431.
In Asia, the Japanese Nikkei 225 soared 1.1% to 10,083 and the Chinese Hang Seng dropped 1% to 22,518.