By Ryan Vlastelica
S&P 500 on track for a record close
U.S. stocks rose on Wednesday, with the Dow Jones Industrial
Average hitting its latest in a series of records and aiming for a
fifth straight positive session.
The day's gains were broad-based, with all 11 of the S&P
500's primary sectors in positive territory, though financial
stocks were the strongest performers of the day.
Where are the major benchmarks trading?
The Dow Jones Industrial Average rose 130 points, or 0.5%, to
26,909. The blue-chip average hit an all-time high of
26,920.51.
The S&P 500 gained 11 points to 2,034, a rise of 0.4% that
put it on track for a record close, although it remains roughly
0.2% below its own all-time intraday high. The Nasdaq Composite
Index climbed 24 points to 8,024, a rise of 0.3%.
What's driving markets?
Wall Street got an early lift on Wednesday after a report in
Italian daily newspaper Corriere della Sera that the government may
yield ground
(http://www.marketwatch.com/story/euro-rebounds-after-report-italy-will-play-by-eus-budget-deficit-rules-2018-10-03)
in a budget stalemate with the EU, which could lessen the odds of a
clash between the country and the bloc.
According to the report, Italy's budget deficit target will be
set at 2.4% of GDP in 2019, but decline to 2.2% in 2020 and 2.0% in
2021. Italian officials had previously clashed with Brussels over
the budget deficit target, which exceeded EU rules and stoked fears
of another crisis
(http://www.marketwatch.com/story/for-italy-the-euro-is-unrenouncable-its-prime-minister-reassures-2018-10-02)
in the region.
While U.S. stocks have mostly shrugged off political
uncertainties from across the globe -- in addition to Italy's
budget, investors have looked past the UK's Brexit negotiations and
the myriad issues surrounding U.S. trade policy with other major
economies -- a resolution of this issue would mean one less
potential risk to watch out for.
On the economic data front, private-sector employment soared in
September
(http://www.marketwatch.com/story/us-adds-230000-private-sector-jobs-in-september-adp-2018-10-03),
as employers added 230,000 jobs, more than had been expected,
according to Automatic Data Processing Inc. The report is the first
of three readings on the labor market that will be released this
week. Thursday will see the latest data on jobless claims, while
Friday has the closely watched September jobs report.
Separately, the final reading on the services sector from IHS
Markit fell to 53.5 in September from 54.8, while the Institute for
Supply Management's reading on the non-manufacturing sector came in
at 61.6, above expectations for a reading of 58.
Wednesday will be marked by comments from a number of officials
from the Federal Reserve, including Chicago Fed President Charles
Evans, who reiterated his upbeat outlook for the economy
(https://www.wsj.com/articles/federal-reserve-should-press-ahead-with-gradual-rate-rises-feds-evans-says-1538562604)
and said the Fed would likely need to set monetary policy that
prevent the economy from overheating.
In the afternoon, Cleveland Fed President Loretta Mester is
scheduled to speak, as is Lael Brainard, a governor on the Fed's
board. Finally, Jerome Powell is scheduled to speak at 4 p.m. ET.
On Tuesday, Powell, reiterated that he did not see signs that
inflation could spike despite the low unemployment rate.
The comments came after the Fed last week raised rates for the
third time this year and indicated it would do so again in
December.
What are market analysts saying?
When it comes to Italy's budget, "the issue is compliance with
EU rules," said Marshall Gittler, chief strategist at ACLS Global.
"If Italy flouts EU rules, then the other countries are not likely
to come to its rescue if and when it gets into financial trouble --
as it has in the not-so-distant past. It's the politics behind the
move, not the economics. If Italy cooperates with the EU, then the
EU is more likely to cooperate if necessary."
What stocks are in focus?
Facebook Inc.(FB) photo-sharing social network Instagram
suffered a world-wide outage Wednesday
(http://www.marketwatch.com/story/facebooks-instagram-suffers-worldwide-outage-as-new-head-of-app-takes-over-2018-10-03)
but has since resumed service for most users, a glitch that comes
just days after it named a new head of the app. Shares of Facebook
rose 1.4%, although they remain down 1.7% thus far this week.
Shares of J.C. Penney Co. Inc. (JCP) rose 3% a day after it said
its board of directors has appointed retail veteran Jill Soltau as
chief executive officer and a board member
(http://www.marketwatch.com/story/jc-penney-names-former-joann-stores-ceo-its-top-executive-2018-10-02),
effective Oct. 15.
Tempur Sealy International Inc. (TPX) shares jumped 9% following
a report
(http://www.marketwatch.com/story/tempur-sealys-stock-soars-after-report-mattress-firm-bankruptcy-was-imminent-2018-10-03)
that rival mattress retailer Mattress Firm Inc. is close to filing
for bankruptcy.
RPM International Inc.(RPM) reported adjusted first-quarter
earnings that missed expectations
(http://www.marketwatch.com/story/rpm-profit-falls-40-to-miss-estimates-2018-10-03),
but revenue that was ahead of forecasts. Shares were up 0.2%.
Novartis AG(NOVN.EB) entered into a licensing and equity
agreement
(http://www.marketwatch.com/story/novartis-inks-licensing-deal-with-boston-pharma-2018-10-03)
with Boston Pharmaceuticals to develop three anti-infective drug
candidates that are part of the Swiss company's infectious diseases
portfolio. U.S.-listed shares gained 1.3%.
Vodafone Group PLC's (VOD.LN) Italian subsidiary has paid $2.77
billion for four licenses
(http://www.marketwatch.com/story/vodafone-pays-eur24-bln-in-italy-5g-auction-2018-10-03-24852711)
in Italy's 5G-bandwidth auction, the country's Ministry of Economic
Development said late Tuesday. The stock rose 2% on the New York
Stock Exchange.
Where are other markets trading?
Asian stocks traded near break-even levels
(http://www.marketwatch.com/story/nikkei-hang-seng-about-flat-after-making-up-early-losses-2018-10-02),
recovering from early losses. Major European indexes rose,
supported by optimism over Italy.
Crude-oil prices rose 0.1% while gold was unchanged on the day.
The U.S. Dollar Index was slightly lower, with the euro also
getting a bid from Italy.
(END) Dow Jones Newswires
October 03, 2018 10:17 ET (14:17 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024