Nasdaq, S&P 500 rise after fresh jobs data, Treasury yields retreat
Before coming off their highs, the 30-year Treasury yield crossed above 5% for the first time since August 2007, while the 10-year and five-year yields hit their highest since 2007.
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WASHINGTON: The S&P 500 and the Nasdaq rose on Wednesday after fresh data pointed to a cooling labor market, while a pullback in U.S. Treasury yields from their multi-year highs also supported investor sentiment.
Before coming off their highs, the 30-year Treasury yield crossed above 5% for the first time since August 2007, while the 10-year and five-year yields hit their highest since 2007. Major growth stocks Microsoft, Amazon.com, Nvidia, Alphabet and Tesla gained between 0.4% and 2.3%.
The ADP National Employment report showed private payrolls rose 89,000 in September, much lower than the expected 153,000. "This is further evidence that the Fed has done enough and they need to step away," said Thomas Hayes, chairman at Great Hill Capital LLC.
The latest data comes a day after U.S. job openings unexpectedly rose in August. All three major U.S. stock indexes ended more than 1% lower on Tuesday, with the Dow turning negative on a year-to-date basis for the first time since June. Focus now shifts to the more comprehensive non-farm payrolls data due on Friday.
Traders on Wednesday put the chance of interest rates remaining unchanged in November and December at more than 81% and 64%, respectively, according to CME's FedWatch tool. At 10:01 a.m. ET, the Dow Jones Industrial Average was down 23.83 points, or 0.07%, at 32,978.55, the S&P 500 was up 6.32 points, or 0.15%, at 4,235.77, and the Nasdaq Composite was up 58.38 points, or 0.45%, at 13,117.84.
Consumer discretionary stocks led gains among the major S&P 500 sectors, rising 1.0%, while energy shares were an outlier and were down 2.4% as crude prices fell on demand concerns. A final reading of S&P Global's Composite Purchasing Managers' Index for September came in at 50.2 versus a preliminary estimate of 50.1.
Separate data showed the U.S. services sector slowed in September as new orders fell to a nine-month low. A handful of Republicans in the U.S. House of Representatives on Tuesday ousted Republican Speaker Kevin McCarthy, as party infighting plunged Congress into further chaos just days after it narrowly averted a government shutdown.
Helen of Troy fell 8.3% after the home and beauty products maker reported lower second-quarter sales and profit. Rollins was down 2.8% after Spruce Point Capital Management said it was short on the pest-control firm.
Declining issues outnumbered advancers for a 1.02-to-1 ratio on the NYSE and a 1.10-to-1 ratio on the Nasdaq. The S&P index recorded no new 52-week high and 19 new lows, while the Nasdaq recorded 4 new highs and 162 new lows.