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Stock Market News for Sep 2, 2021

The S&P 500 and the Nasdaq closed in the green on Wednesday despite lower-than-expected job additions in the private payroll.

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This story originally appeared on Zacks

The S&P 500 and the Nasdaq closed in the green on Wednesday despite lower-than-expected job additions in the private payroll. Investors digested disappointing employment data and focused on August’s government jobs report to forecast the timing for tapering of the Federal Reserve’s bond purchases. 

- Zacks

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 48.20 points, or 0.1%, to close at 35,312.53. The blue-chip index had a rollercoaster ride on Wednesday, flipping between the positive and negative territory, weighed down by energy and finance stocks. Caterpillar Inc. CAT and Chevron Corporation CVX were the biggest decliners closing at least 1.1% lower for the session. Chevron caries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 rose 1.41 points, or less than 0.1%, to end the session at 4,524.09 on Wednesday. Six of the 11 major sectors of the broader index closed in the green led by 1.7% rise in the real estate sector, followed by utilities that gained 1.3%. The indexes gains were capped by 1.5% decline in the energy sector as more than 80% of oil and gas production in the Gulf of Mexico remains offline due to the aftermath of Hurricane Ida. Shares of PBF Energy Inc. PBF slipped 6.8% yesterday as its 190,000 barrel-per-day Chalmette, Louisiana, refinery lost power.

The Nasdaq Composite Index closed at 15,309.38, a fresh record high, after adding 50.15 points, or 0.3%. The rally in tech stocks boosted the index on Wednesday as they tend to benefit from a low-rate environment. Bigwigs like Netflix, Inc. NFLX closed 2.3% higher, while others like Apple Inc. AAPL, Facebook, Inc. FB closed at least 0.5% higher. Among Nasdaq’s biggest gainers were Pinduoduo Inc. PDD and Baidu, Inc. BIDU that closed 6.8% and 5.2% higher, for the session. 

On Wednesday, the fear-gauge CBOE Volatility Index (VIX) decreased 2.3%, to close at 16.11. The S&P 500 posted 55 new 52-week highs and one new low, while the Nasdaq Composite recorded 131 new highs and 17 new lows. A total of 9.81 billion shares were traded yesterday, higher than the last 20-session average of 8.99 billion.

August’s Private-Payroll Weaker than Expected

On Wednesday, the ADP reported that the country created 374,000 new private-sector jobs in August, much lower than the consensus estimate of 600,000. Per the survey, the delta variant of the coronavirus had depressed hiring last month, though companies do have huge job openings and are trying to fill in positions in anticipation that the latest coronavirus outbreak will fade. ADP’s report highlights that hotels, restaurants, entertainment venues have added 201,000 jobs, higher than 138,000 in July. Meanwhile, education and health care job additions rose by 59,000 and construction added 30,000 new jobs. Investors now wait for the government’s jobs report scheduled for release on Sep 3.

Manufacturing Activity Grows, Construction Outlays Increase

Yesterday, the Institute for Supply Management (ISM) reported that the US manufacturing sector grew in August, with its Manufacturing PMI registering a 0.4 percentage point increase, rising to 59.9%. The latest figures point towards expansion in the overall economy for the 15th month in a row after the pandemic-led contraction in April last year. New Orders have bumped up by 1.8 percentage points to 66.7%, while the Production Index registered 60%, an increase of 1.6 percentage points. However, the employment index has turned negative again at 49%, 3.9 percentage points lower than the previous month. The six biggest manufacturing industries that are computer & electronic products; fabricated metal products; chemical products; food, beverage & tobacco products; transportation equipment; and petroleum & coal products have witnessed moderate growth in August.

In a separate report, the U.S. Census Bureau reported that construction spending rose 0.3% at a seasonally adjusted annual rate of $1,568.8 billion in July. Residential construction spending rose 0.5% and non-residential construction edged up 0.2%.



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