By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Private sector employers add 213,000 jobs
NEW YORK (MarketWatch) -- The U.S. stocks were under pressure on
Wednesday as crude-oil prices gave up part of the gains racked up
over a four-day trading span, while a report on private-sector
hiring disappointed.
Private employers added 213,000 jobs in January, according
Automatic Data Processing Inc. Economists use the number to get a
feel for the official jobs report due on Friday, though some
analysts caution that the ADP's predictive value of official jobs
number isn't stellar.
A sizable drop in oil prices sent energy stocks sharply lower,
while investors grappled with a slew of mixed earnings, from
companies such as General Motors, Walt Disney and Merck &
Co.
The S&P 500 (SPX) was slightly lower with energy and health
care sector stocks leading the losses. Five of 10 main sectors were
trading lower.
The Dow Jones Industrial Average (DJI) hovered near its
Tuesday's closing level, with half of its 30 member trading in
negative territory.
The Nasdaq Composite (RIXF) slumped, with biotech stocks leading
the losses. Gilead Sciences dropped nearly 10% after disappointing
earnings. The iShares Nasdaq Biotechnology ETF was down more than
3%.
Oil prices fell sharply Wednesday, with March WTI crude (CLH5)
dropping more than 4% and Brent crude down nearly 3%. Losses came
after data released late Tuesday showed a big inventory build.
Need to Know: Careful what you wish for: Oil-price recovery may
well sting
A market battleground: Expect a "battle of the bulls and bears"
for Wednesday, said Michael O'Rourke, chief market strategist with
JonesTrading. He notes that so far in 2015, the S&P 500 has
been range-bound, with a range of 1,980 to 1,990 as support and
2,050 to 2,060 serving as resistance points.
"With the growing list of negatives, we are continually amazed
at how many opportunities this market is giving investors to
de-risk within 2% of the all-time high," O'Rourke said in a
note.
Stocks in the spotlight: J.M. Smucker Company (SJM) shares
jumped after the company late Tuesday announced it plans to buy Big
Heart Pet Brands for $3.2 billion excluding debt.
General Motors (GM.XX) shares rose 4% after it posted results
and said it would boost its dividend 20% to 36 cents a share.
Clorox Co.(CLX) shares jumped after the company beat earnings
estimates and lifted outlook.
Merck (MRK) was down 2% after it released results.
Finally getting the deal done: Staples Inc.(SPLS) said it will
buy Office Depot Inc.(ODP) in an acquisition valued at $6.3
billion. Office Depot rose 2.6% and Staples was down 5% on that
news.
Walt Disney Co.(DIS) is up 4% after earnings beat forecasts. On
the losing side, Chipotle Mexican Grill Inc.(CMG) is down over 6%
after profit jumped but sales fell short of expectations late
Tuesday. Gilead Sciences Inc.(GILD) is down 9% after it reported
earnings that beat forecasts, but said it expects price discounts
for its hepatitis C drugs to double in 2015.
See more after-hours action in Movers & Shakers
China cuts reserve requirement for banks: The Nikkei 225 index
saw its biggest gain in two weeks on upbeat earnings. Well after
the close for Chinese stocks, which ended the day lower, the
People's Bank of China cut its reserve ratio for banks by 0.5%.
Among the reactions, gold (GCH5) and copper (HGH5) prices moved
higher.
The Stoxx Europe 600 index was largely flat after sizable gains
on Tuesday, led by a 11% surge for Greek stocks. The Athens
Composite Index was down 1.6% as Prime Minister Alexis Tsipras and
Finance Minister Yanis Varoufakis sought a debt deal with greater
leniency on repayments.
Read: European stocks mixed as Greece continues debt push
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