Major Averages Fluctuate Before Closing Narrowly Mixed

(RTTNews) - Stocks recovered from an initial move to the downside and spent most of Wednesday's trading session in positive territory. Buying interest waned in the latter part of the session, however, with the major averages eventually ending the day narrowly mixed.

While the Dow edged down 43.10 points or 0.1 percent to 39,127.14, closing lower for the third consecutive session, the S&P 500 crept up 5.68 points or 0.1 percent to 5,211.49 and the Nasdaq rose 37.00 points or 0.2 percent to 16,277.46.

The early turnaround on Wall Street came following the release of a report from the Institute for Supply Management showing an unexpected slowdown in the pace of U.S. service sector growth in the month of March.

The ISM said its services PMI dipped to 51.4 in March from 52.6 in February. While a reading above 50 still indicates growth in the sector, economists had expected the index to inch up to 52.7.

Notably, the report also showed a substantial slowdown in the pace of price growth in the sector, with the prices index tumbling to 53.4 in March from 58.6 in February. The index fell to its lowest level since March 2020.

The data helped ease recent concerns about the outlook for interest rates, which contributed to a steep drop by stocks on Tuesday.

Worries the Federal Reserve may hold off on lowering interest rates also contributed to the early weakness on Wall Street after payroll processor ADP released a report this morning showing stronger than expected private sector job growth in the U.S. in the month of March.

ADP said private sector employment jumped by 184,000 jobs in March after climbing by an upwardly revised 155,000 jobs in February.

Economists had expected private sector employment to increase by 148,000 jobs compared to the addition of 140,000 jobs originally reported for the previous month.

Meanwhile, Fed Chair Jerome Powell reiterated during remarks at Stanford University that the central bank is not in a hurry to begin lowering interest rates.

Powell pointed to higher inflation data over January and February as a reason for the Fed to be cautious but acknowledged it is "too soon to say whether the recent readings represent more than just a bump."

"We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent," Powell said.

He added, "Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy."

The modest lower close by the Dow partly reflected steep drop by shares of Intel (INTC), with the semiconductor giant plunging by 8.2 percent.

Intel came under pressure after disclosing a $7 billion operating loss by its semiconductor manufacturing business in 2023, wider than the $5.2 billion operating loss the year before.

Sector News

Gold stocks saw significant strength on the day, driving the NYSE Arca Gold Bugs Index up by 2.3 percent to its best closing level in over ten months.

The rally by gold stocks came as the price of the precious metal jumped to a new record high, with gold for June delivery surging $33.20 to $2,315 an ounce.

Considerable strength was also visible among computer hardware stocks, as reflected by the 2.1 percent jump by the NYSE Arca Computer Hardware Index.

An increase by the price of crude oil also contributed to notable strength among energy stocks, while housing stocks also moved to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.0 percent, while Hong Kong's Hang Seng Index tumbled by 1.2 percent.

Meanwhile, the major European markets moved to the upside on the day. While the German DAX Index climbed by 0.5 percent, the French CAC 40 Index rose by 0.3 percent and the U.K.'s FTSE 100 Index closed just above the unchanged line.

In the bond market, treasuries recovered from early weakness to end the day slightly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.0 basis point to 4.355 percent after reaching a high of 4.429 percent.

Looking Ahead

Reports on weekly jobless claims and the U.S. trade deficit may attract attention on Thursday, although trading activity is likely to be somewhat subdued ahead of the release of the more closely watched monthly jobs report on Friday.