US stocks are mostly down after yesterday’s rebound
(RTTNews) – Extending the roller coaster seen in the first trading days of October, stocks are mostly down in Wednesday morning trading. With the day’s decline, the main averages partially offset the strong gains from yesterday.
Currently, major averages are down from their session lows but still in negative territory. The Dow Jones is down 258.35 points or 0.8% to 34,056.32, the Nasdaq is down 41.02 points or 0.3% to 14,392.81 and the S&P 500 is down 24.02 points or 0.6% at 4,321.70.
Persistent concerns about inflation and the Federal Reserve’s cutback in stimulus contributed to Wall Street’s pullback after the rebound seen in the previous session.
Traders are also monitoring developments in Washington, where lawmakers are currently stuck on raising the debt ceiling.
Treasury Secretary Janet Yellen has warned that the United States could face a recession if Congress does not raise the debt ceiling by October 18.
“It would be catastrophic not to pay government bills, for us to be in a position where we lack the resources to pay government bills,” Yellen said in an interview on CNBC. “I expect that will cause a recession as well.”
However, the selling pressure is somewhat subdued following the release of a report by payroll processor ADP showing stronger than expected private sector job growth in September.
ADP said private sector employment jumped 568,000 jobs in September after increasing by 340,000 downgraded jobs in August.
Economists expected private sector employment to climb by 428,000 from the 374,000 addition initially reported for the previous month.
“The labor market recovery continues to progress despite a sharp slowdown from 748,000 jobs in the second quarter,” said Nela Richardson, chief economist of ADP.
She added: “Current bottlenecks in hiring are expected to ease as health conditions related to the COVID-19 variant continue to improve, paving the way for strong job gains in the coming months. “
The Labor Department is expected to release its more closely watched monthly employment report on Friday, which includes both public and private sector jobs.
Economists currently expect employment to increase by 488,000 jobs in September after increasing by 235,000 in August. The unemployment rate is expected to drop to 5.1% from 5.2%.
Oil services stocks experienced substantial weakness that day, causing the Philadelphia Oil Services Index to fall 4.8%. The index is losing ground after closing the previous session at a nearly three-month closing high.
The pullback in oil services stocks comes amid sharply lower crude oil prices, with crude for November delivery falling from $ 1.58 to $ 77.35 per barrel.
Significant weakness is also visible among airline stocks, as evidenced by the 3.8% drop in the NYSE Arca Airline index.
JetBlue (JBLU) and American Airlines (AAL) post large losses after Goldman Sachs downgraded its rating on airlines to Neutral and Sell, respectively.
Natural gas, steel and hardware stocks are also experiencing considerable weakness, moving lower with most of the other major sectors.
In overseas trading, stock markets in the Asia-Pacific region were mostly down during Wednesday’s session. Japan’s Nikkei 225 index fell 1.1%, while Hong Kong’s Hang Seng index fell 0.6%.
The main European markets also moved down that day. While the UK FTSE 100 index fell 1%, the German DAX index and the French CAC 40 index are both down 1.3%.
In the bond market, Treasuries edged higher during the morning after experiencing initial weakness. As a result, the yield on the ten-year benchmark bond, which moves opposite to its price, is down 1.9 basis points to 1.510%.
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