Stocks end Wednesday slightly lower following huge two-day surge


new York
CNN business

Maybe this October market rally has some legs after all?

Stocks were broadly flat on Wednesday, even as a fresh set of economic data revealed continued strength in jobs and the US service sector. That has fueled fresh fears that the Federal Reserve’s aggressive rate hikes aimed at curbing inflation will ultimately lead to a recession.

The Dow ended the day down a little over 40 points, or 0.1%. The Dow had previously fallen more than 400 points and briefly slipped back below 30,000.

However, Wednesday’s drop ended a brief winning streak on Wall Street. The Dow rose nearly 1,600 points over the course of Monday and Tuesday.

Also Read :  Massive Options Trade Fueled 2% Surge in S&P 500

The S&P 500 and Nasdaq, also up sharply over the past two days, fell 0.2% and 0.3%, respectively.

Shares fell earlier this week despite concerns over the financial health of global banking giant Credit Suisse (CS) and a drop in job vacancies in the United States.

This bad news lifted sentiment on Wall Street as investors bet it could prompt the Fed to slow the pace of rate hikes. Australia’s central bank also hiked interest rates by a smaller-than-expected amount this week, fueling hopes that global policymakers are more concerned about an economic slowdown than inflation.

Also Read :  These 6 Titles Have Just Been Named the Best Business Books of the Year

But that narrative shifted briefly on Wednesday. Payroll processor ADP reported a stronger-than-expected increase in private sector jobs for September, a sign that American companies are still hiring at a solid pace.

Additionally, the Institute for Supply Management reported Wednesday that its Non-Manufacturing Index was higher than forecast. Activity slowed from August, but service companies still reported steady growth.

Solid economic data should keep the Fed on course to hike rates sharply in November and December…perhaps too sharply. There is growing concern that the likelihood of a so-called monetary policy error is increasing and the Fed is causing a recession.

Also Read :  Black Business Strategies program expands entrepreneurship opportunities • Long Beach Business Journal

Rising energy prices could also weigh on consumer sentiment. OPEC announced production cuts on Wednesday, news that pushed oil prices higher. The rise in oil prices buoyed energy stocks and helped support the broader market.

Chevron (CVX) was one of the best-performing Dow stocks, up about 1%. Exxon Mobil (XOM) and oil services giants Schlumberger (SLB) and Halliburton (HAL) were among the top companies in the S&P 500, with each stock gaining between 4% and 6%.

Leave a Reply

Your email address will not be published.