Stocks Are Flat After Fed Minutes
Stocks struggled to hold gains Wednesday as tech, insurance and energy stocks advanced but worries about the recovery nagged at the market.
A more solid rally was expected after Tuesday's selloff but readings on employment and manufacturing came in weaker than expected, which stirred doubt.
Federal Reserve policy makers are confident the recession is ending and are therefore more comfortable slowing down their economic-revival programs, according to minutes from thier last meeting.
Tech stocks rose following a couple of pieces of news from the sector: Dell has agreed to sell Brocade networking and storage gear through its sales operations, offering corporate customers a wider selection of products.
And Nokia is taking another shot at Apple , offering an $820 laptop in addition to its plans to launch a smartphone line.
Insurers and energy stocks were also higher, with American Express up more than 1 percent.
Dow energy components ExxonMobil and Chevron advanced as oil prices ticked higher after a report showed crude supplies declined by 400,000 barrels last week.
BP rose more than 4 percent after the oil company announces what it terms a "giant" oil discovery in the Gulf of Mexico. ConocoPhillips is also a partner in that project.
A few readings on employment today: ADP Employer Services said private employers cut 298,000 jobsin August, fewer than the downwardly-revised 360,000 jobs lost in July, but considerably worse than expectations of 250,000.
And planned layoffs fell 21 percent to 76,456 last month from July, according to a report from outplacement consultant Challenger, Gray & Christmas.
These reports are closely watched for insight on the employment picture ahead of the Labor Department's August jobs report, due out Friday. Economists expect to see that 233,000 jobs were lost, slightly fewer than the 247,000 lost in July, and that the unemployment rate ticked up to 9.5 percent.
"[W]e reckon Friday's official number will be about 250K. That's still terrible, but it does mean that the trend towards smaller net job losses continues," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note to clients. "The move to payroll stability ... is some way off yet, though."
In the day's other economic news, factory orders rose 1.3 percentin July, the fourth straight increase but smaller than the 2.2 percent expected. Nonfarm productivity rose at a 6.6 percent annual rate in August and mortgage applications fell by a seasonally adjusted 2.2 percent last week as demand for both purchase and refinance loans slipped.
This came after stocks tumbled 2 percentTuesday, their third straight decline and longest losing streak since June. The bulk of the losses came from the financial sector as investors got the jitters from whispers that another major bank failure was in the works.
Financials were back in the spotlight, including Bank of America , Citigroup , Wells Fargo , AIG and CIT Group .
Fannie Mae and Freddie Mac both tumbled more than 15 percent.
Boeing shares slipped as the aerospace giant and rival Airbus will find out this week which one won what may just be the biggest commercial trade dispute in modern history.
Pfizer shares fell after the company agreed to pay a $2.3 billion to settle civil charges over the marketing of its withdrawn pain medication Bextra and other drugs.
Still to Come:
WEDNESDAY: Fed minutes
THURSDAY: Chain-store sales; weekly jobless claims; ISM services index
FRIDAY: August jobs report
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