MARKET SNAPSHOT: U.S. Stocks Hit Day's Highs After Beige Book
03 September 2015 - 5:13AM
Dow Jones News
By Sue Chang and Anora Mahmudova, MarketWatch
U.S. stocks hit the day's highs after a Federal Reserve report
on Wednesday painted a more optimistic economic picture just two
weeks before policy makers meet to discuss whether to raise
interest rates for the first time in nearly a decade.
The Federal Reserve's Beige Book said
(http://www.marketwatch.com/story/feds-beige-book-finds-wage-pressure-and-china-dollar-concerns-2015-09-02)
several district banks "reported increasing wage pressures caused
by labor market tightening" a change from earlier reports that
noted higher pay in isolated sectors. But there were also reports
that the strong dollar and the drop in oil prices were depressing
activity, which could argue for holding off on raising interest
rates at the Sept. 16-17 policy meeting.
Wednesday afternoon's gains add to the market's rebound from
Tuesday's selloff, even as some analysts cautioned against
expecting much of a recovery.
The S&P 500 was up 23 points, or 1.2%, to 1,937. The Dow
Jones Industrial Average rose 216 points, or 1.3%, to 16,274. The
Nasdaq Composite advanced 74 points, or 1.6%, to 4,710.
"The rebound feels just like some of the selling was exhausted
yesterday into the bell. We have seen some funds taking hedges off
on the S&P 500, but no real demand in single stocks so that is
a little disconcerting," said Ian Winer, director of equity trading
at Wedbush Securities.
Read:One in five S&P 500 stocks now in bear-market territory
for 2015
(http://www.marketwatch.com/story/one-in-five-sp-500-stocks-now-in-bear-market-territory-for-2015-2015-09-02)
The market was higher from the opening bell after U.S. data
showed solid private-sector job gains in August and a jump in
productivity growth in the second quarter. A somewhat stable
trading session in China ahead of the country's long holiday
weekend helped. The Shanghai Composite Index slipped 0.2%
(http://www.marketwatch.com/storyno-meta-for-guid), and China's
stock markets are closed Thursday and Friday
(http://www.marketwatch.com/story/china-to-close-stock-market-to-honor-world-war-ii-anniversary-2015-09-01)
for the World War II Victory Day parade.
Wednesday's data and the Beige Book as well as the monthly
payrolls report due Friday are among the last economic news before
the Federal Reserve makes a decision on interest rates at its Sept.
16-17 policy meeting.
Speaking about Friday's jobs report, Michael Arone, chief
investment strategist at State Street Global Advisors' US
Intermediary Business, predicted it would have something both for
those who would like to see rates rise in September and for those
who would prefer a delay.
"It is likely to be in line with consensus estimate, but will
not give investors a definitive answer as to what the Fed is likely
to do. Until the is clarity about the rate policy, we expect
volatility to continue in the near term," Arone said.
Read:Where every Fed member stands on raising interest rates
(http://www.marketwatch.com/story/where-every-fed-member-stands-on-raising-interest-rates-2015-08-28).
U.S. data: Private-sector employment gains continued in August
(http://www.marketwatch.com/story/private-sector-adds-190000-jobs-in-august-adp-2015-09-02-8911922)
at a slightly faster pace than in July. Employers added 190,000
jobs last month, Automatic Data Processing Inc. reported
Wednesday.
U.S. productivity in the second quarter rose at the fastest pace
since the end of 2013
(http://www.marketwatch.com/story/us-productivity-rises-at-fastest-pace-since-end-of-2013-2015-09-02).
Factory orders rose 0.4% in July, marking the second month of gains
after a strong June
(http://www.marketwatch.com/story/factory-orders-rise-for-second-month-in-july-2015-09-02).
"Investors are interpreting the ADP data, showing 190,000 jobs
as not big enough for the Fed to go ahead with the September rate
hike, but solid enough to indicate there is no spillover from
China's weakness into our economy," said John Canally, investment
strategist and economist at LPL Financial.
Movers and shakers: Apple Inc. (AAPL) climbed 3% and Microsoft
Corp. (MSFT) gained 2.7%, underpinning the Dow's rise.
Shares of H&R Block Inc. (HRB) jumped more than 7% after the
company announced a new $3.5 billion stock repurchase program.
Dollar Tree Inc.(DLTR) shares fell 3.5%, adding to a 8.7% loss
on Tuesday when the discount retailer announced it swung into a
loss during the latest quarter.
After Tuesday's closing bell, AT&T Inc.(T) said TRC Capital
Corp. has made an unsolicited "mini-tender" offer
(http://www.marketwatch.com/story/att-recommends-shareholders-reject-trc-capitals-3-million-share-mini-tender-offer-2015-09-01)
to buy up to 3 million of the telecom company's shares. AT&T
recommended that shareholders reject the offer. Shares were up
1%.
Intel Corp.(INTC) rose 2% after the tech giant late Tuesday said
it is overhauling its flagship line of computer chips
(http://www.wsj.com/articles/intel-overhauls-chips-in-bid-to-revive-pc-sales-1441155601).
Other markets: October WTI crude recovered to add 0.5% to $45.62
a barrel on the New York Mercantile Exchange. Gold inched lower,
while the ICE dollar index rose 0.4% to 95.82.
Sara Sjolin contributed to this article.
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(END) Dow Jones Newswires
September 02, 2015 14:58 ET (18:58 GMT)
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