By Anora Mahmudova and Barbara Kollmeyer, MarketWatch Oil, gold
prices rise
NEW YORK (MarketWatch) -- U.S. stocks were ticking higher
Wednesday, partly driven by a gains in energy and materials as oil
prices staged a modest rally.
The S&P 500 (SPX) and the Dow Jones Industrial Average (DJI)
hovered near record-closing levels, while the Nasdaq Composite
(RIXF) also edged higher.
In economic news, a reading of private sector employment showed
that hiring slowed in November, though employers added more than
200,000 jobs in seven of the past eight months. The productivity
for the third quarter was revised upwards, however, labor costs
fell, pointing at lagging wages.
Meanwhile, U.S. services companies reported that growth ramped
up in November, with a gauge of activity rising to 59.3% from 57.1%
in October, according to a survey of senior executives released
Wednesday by the Institute for Supply Management.
"Luke-warm reports are the new good," said Joseph Saluzzi
co-founder and co-head of equity trading at Themis Trading, a
brokerage firm, commenting on Wednesday's data,
"It's not too hot and not too cold, and on Wall Street there is
a belief that the U.S. economy is immune to global deflationary
problems. But it is a matter of time before deflation catches up
here as well," Saluzzi said.
Busy economic calendar:Private-sector hiring slowed in November,
as employers added 208,000 jobs, ADP reported Wednesday. Analysts
watch the data closely, as it is used to get a feel for the larger
government employment report due Friday. The correlation between
those two numbers isn't foolproof, though.
U.S. companies and workers were more productive in the third
quarter than initially reported, but labor costs fell sharply for
the second straight time in a sign that wages continue to lag
behind. Productivity grew at a revised 2.3% annual pace instead of
2%, newly revised government figures show.
U.S. services companies reported that growth ramped up in
November, with a gauge of their activity rising to 59.3% from 57.1%
in October, according to a survey of senior executives released
Wednesday by the Institute for Supply Management.
The Federal Reserve's Beige Book is due at 2 p.m. Eastern. The
report is a collection of anecdotes from Fed contacts around the
country and gives the central bank a feel for overall economic
conditions ahead of its next meeting, scheduled for December
16-17.
The European Central Bank also meets this week, on Thursday. The
pressure is expected to be on ECB President Mario Draghi and
officials to "provide when and how eurozone stimulus will appear
tomorrow", given recent disappointing eurozone PMI figures, said
Connor Campbell, financial analyst at SpreadEx. The composite PMI
fell to a 16-month low in November, weaker than the initial
estimate.
Stocks for Wednesday: Brown-Forman Corp. (BFB) reported
increased sales of its Jack Daniel's whiskey but missed analysts'
second-quarter profit expectations and cut its outlook on worries
about a strengthening U.S. dollar. The stock was the worst
performer on the S&P 500.
Energy sector stocks rose sharply, with major oil producers,
such as Exxon Mobile Corp (XOM) and ConocoPhillips (COP) up 0.9%
and 1.6% respectively. Energy companies dropped more than 25% since
this summer when oil prices peaked in June at $110 a barrel.
Shares of Abercrombie & Fitch Co.(ANF) initially dropped
following a lower-than-expected full-year earnings forecast from
the clothing retailer, however shares rose in regular trade.
Apparel retailers Guess Inc.(GES) and Aéropostale Inc.(ARO) are
expected to report after the close.
Puma Biotechnology Inc.(PBYI) tanked after the pharmaceutical
company delayed its breast-cancer drug application to early 2016.
See Stocks to Watch
Other markets: European stocks posted moderate gains across the
board despite downbeat eurozone PMI data. The FTSE 100 index was
down slightly ahead of Chancellor of the Exchequer George Osborne's
Autumn Statement on the government's economic plans.
The dollar rose against the yen (USDJPY) after setting a fresh
7-year high late Tuesday. However, the euro (EURUSD) was at
$1.2330, the lowest since August 2012.
January crude (CLF5) was up about $1. American Petroleum
Institute data late Tuesday showed a steep fall in U.S. crude
inventories. Gold prices (GCG5) were trading higher, just over
$1,206 an ounce. Read: T. Boone Pickens predicts $100 a barrel is
coming back
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