Wall Street closed higher on Wednesday after a choppy trading session. Progress on government debt ceiling deal and better-than-expected private payrolls bolstered market participants’ confidence. All three major stock indexes ended in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.3% or 102.37 points to close at 34,416.99. Notably, 20 components of the 30-stock index ended in the green while 10 in red. At its session low, the blue-chip index was down more than 450 points. This marked the index’s best intraday come back since Dec 21. Moreover, the tech-heavy Nasdaq Composite finished at 14,501.91, gaining 0.4% due to strong performance by large-cap technology stocks.
Meanwhile, the S&P 500 increased 0.4% to end at 4,363.55. Eight out of eleven sectors of the benchmark index closed in positive territory and three in red. The Utilities Select Sector SPDR (XLU), the Consumer Staple Select Sector SPDR (XLP) and the Real Estate Select Sector SPDR (XLRE) gained 1.6%, 1% and 1%, respectively. The Energy Select Sector SPDR (XLE) dropped 1.1%.
The fear-gauge CBOE Volatility Index (VIX) was down 1.4% to 21. A total of 10.6 billion shares were traded on Wednesday, lower than the last 20-session average of 11 billion. Decliners outnumbered advancers on the NYSE by a 1.31-to-1 ratio. On Nasdaq, a 1.58-to-1 ratio favored declining issues.
Progress on Debt Ceiling Deal
Senate Minority Leader Mitch McConnell offered a new proposal to the Democratic-run Senate as a stop-gap measure of suspension of the U.S. debt ceiling to avert a national default and a possible economic recession. President Joe Biden kept pressure on lawmakers to raise the U.S. borrowing limit.
In a statement, McConnell said “To protect the American people from a near-term Democrat-created crisis, we will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December.”
Big Techs Rebound
The technology behemoths that lost significant value in October so far after September’s market turmoil, regained some ground. As yield on the benchmark 10-Year U.S. Treasury Note fell to 1.524% from its session’s high of 1.58%, investors started buying tech giants on the dip.
Consequently, shares of Microsoft Corp,
MSFT
, Alphabet Inc.
GOOGL
, Apple Inc.
AAPL
and NVIDIA Corp.
NVDA
were up 1.5%, 1.1%, 0.6% and 1.2%, respectively. Microsoft and NVIDIA carry a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Economic Data
Automatic Data Processing Inc.
ADP
reported that U.S. private payrolls jumped to 568,000 for the month of September, well above the consensus estimate of 425,000. However, the data for August was revised downward to 340,000 from 374,000 reported earlier.
As new cases of the highly-infectious Delta variant of coronavirus subdued last month, the reopening-oriented leisure and hospitality sector added 226,000 jobs. Per CDC, in the United States, 7-day average new cases came in at 97,909 as of Oct 4, compared with 160,284 a month ago.
The services sector added 466,000 new jobs, supported by education and health services with 66,000, professional and business services with 61,000, and 54,000 from trade, transportation and utilities. The goods producers added a solid 102,000 manpower. Manufacturing contributed 49,000 and construction added 46,000.
The U.S. Energy Information Administration reported that commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.3 million barrels during the week ended Oct 1, from the previous week.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report