Written by Gary
Closing Market Commentary For 07-01-2014
Gary is out of the office this afternoon. This report is from our content sharing partner Investing .com.
U.S. stocks ended Wednesday’s session mixed to higher, buoyed by news out of the labor market and capped by comments from Fed Chair Janet Yellen, who said monetary policy is limited when dealing with financial stability risks.
At the close of U.S. trading, the Dow 30 rose 0.12%, the S&P 500 index rose 0.07%, while the NASDAQ Compositeindex fell 0.02%.
The Volatility S&P 500 index, which measures the outlook for market volatility, was down 2.42% at 10.88.
Payroll processor ADP reported earlier in its nonfarm payrolls report that the U.S private sector added 281,000 jobs last month, beating expectations for an increase of 200,000 and the highest since November 2012.
The upbeat data eased concerns that headwinds may be slowing U.S. recovery and gave stocks room to rise.
Still, concerns begin to brew that as both the economy and the jobs market improve, labor costs will rise, which could show up in earnings reports down the road, which capped gains on Wall Street as investors priced in such scenarios.
A separate report showed that U.S. factory orders fell by a larger than forecast 0.5% in May.
Elsewhere, Federal Reserve Chair Janet Yellen said earlier that the appetite for risk appears to be on the rise, though the country’s top economist sees no need to immediately alter today’s accommodative monetary policy.
Corporate bond spreads have been falling as have volatility indicators such as the VIX, which may indicate investors are taking on risks despite the possibility of facing losses for which they might not be fully prepared, Yellen said in a speech at the International Monetary Fund.
Still, policy will remain accommodative, as Fed policies aren’t a panacea to deal with financial risks.
Leading Dow Jones Industrial Average performers included International Business Machines (NYSE:IBM), up 1.10%, Pfizer Inc (NYSE:PFE), up 0.98%, and Merck & Company Inc (NYSE:MRK), up 0.91%.
The Dow Jones Industrial Average’s worst performers included J P Morgan Chase & Co (NYSE:JPM), down 1.05%, United Technologies Corporation (NYSE:UTX), down 0.69%, and The Travelers Companies Inc (NYSE:TRV), down 0.63%.
European indices, meanwhile, ended the day mixed.
After the close of European trade, the DJ Euro Stoxx 50 fell 0.14%, France’s CAC 40 fell 0.37%, while Germany’s DAX rose 0.09%. Meanwhile, in the U.K. the FTSE 100 rose 0.20%.
On Thursday, the U.S. is to publish data on its trade balance, a weekly report on initial jobless claims and closely watched government data on nonfarm payrolls and the unemployment rate, one day ahead of schedule, before the Independence Day holiday.
Later Thursday, the Institute of Supply Management is to publish a report service-sector activity.
Source:
U.S. stocks gain on data, Yellen comments; Dow rises 0.12% (Investing.com, 02 July 2014)
