Stock Market News for Oct 5, 2023
Wall Street closed higher on Wednesday, driven by tech and discretionary stocks. Stocks rebounded on weaker-than-expected jobs numbers. All of the three major stock indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 0.4% or 127.17 points to close at 33,129.55. Twenty-two components of the 30-stock index ended in positive territory, while eight ended in negative.
The tech-heavy Nasdaq Composite added 176.54 points or 1.4% to close at 13,236.01.
The S&P 500 gained 34.3 points, or 0.8%%, to close at 4,263.75. Ten of the 11 broad sectors of the benchmark index closed in the red, while one ended in the green. The Consumer Discretionary Select Sector SPDR (XLY), the Technology Select Sector SPDR (XLK) and the Materials Select Sector SPDR (XLB) rose 2%, 1.3% and 1.2%, respectively, while the Energy Select Sector SPDR (XLE) fell 3.1%.
The fear-gauge CBOE Volatility Index (VIX) decreased 6.1% to 18.58. A total of 10.5 billion shares were traded on Wednesday, lower than the last 20-session average of 10.6 billion. Advancers outnumbered decliners on the NYSE by a 1.45-to-1 ratio. On the Nasdaq, advancing issues led decliners by 1.30-to-1.
ADP Private Payrolls Report Drives the Market
Automatic Data Processing’s ADP National Employment Report for September was released on Wednesday. The report showed private payrolls increasing by 89,000 jobs in September, the lowest since January 2021. In August, the jobs count had grown by 180,000.
The numbers for September, which have hit almost a 3-year low, were way below expectations and have been cheered by investors who see this as a sign of the labor market loosening. A tight labor market has kept market participants on the edge throughout the period that the Fed has been raising interest rates because a robust jobs scene has continued to deter the central bank from going slow in policy tightening.
However, the more closely watched jobs report will be released by the labor department on Friday, and investors eagerly await its findings. In the meantime, ADP’s report provided much-required respite to the market, which was reeling under recession fears in recent weeks.
Consequently, shares of Tesla, Inc. TSLA and American Airlines Group Inc. AAL jumped 5.9% and 3.6%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Oil Prices Plunge on Weak Demand for Gasoline
On Wednesday, the U.S. Energy Information Administration reported that finished motor gasoline supplied had fallen to 8 million bpd, its lowest in 2023. The post-tropical storm Ophelia and torrential rains are being seen as major reasons behind this drastic fall in demand.
On cue, oil prices plummeted in the session, with Brent crude declining $5.11, or 5.6%, to $85.81/barrel, while the WTI crude fell $5.01, or 5.6%, to $84.22. The S&P Energy SPDR slid more than 3%, bringing energy stocks down.
Economic Data
The Institute for Supply Management (“ISM”) reported that the ISM Services Index for September had come in at 53.6. The number for August was unrevised at 54.5.
The U.S. Census Bureau announced that factory orders had increased 1.2% in August against a consensus of a 0.2% rise. The July number remained unrevised at a decrease of 2.1%.
Per a government report, for the week ended Sep 29, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.2 million barrels from the previous week.
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