Stocks Pare Gains After ISM Services Report
Stocks pared their gains Thursday after a report showed the services sector grew for a fifth straight month but wasn't a blowout number. Stocks had opened higher after a pair of encouraging employment reports.
The ISM reported its nonmanufacturing index, one of the best gauges of the services sector, which accounts for 80 percent of economic activity, held steady at 55.4 in May from April. Still, the index has remained above 50, a level that indicates growth, for five straight months.
But the market seemed disappointed it wasn't a blowout number and the Dow Jones Industrial Average pared its gain down to 2 points, after being up more than 60 earlier.
The morning leaders on the Dow were Cisco , Microsoft and Coca-Cola.
Meanwhile, factory orders rose 1.2 percent in April after a 1.7-percent gain in March. Plus, the government said initial claims for unemployment insurance dropped to 455,000last week, though the number of people still receiving benefits rose unexpectedly. And the private sector added 55,000 jobs in May, less than expected, according to a report from ADP.
A separate report showed nonfarm productivity slowed to a 2.8 percent annual rate in the first quarter, down from the initial estimate of 3.6 percent and the slowest pace in a year, as businesses started adding workers to maintain output.
Stocks saw their third best day of the yearWednesday, thanks to a late-session rally, with each of the three major indexes ending more than 2 percent higher. Energy and financials shares were the lead gainers after better-than-expected housing data boosted investor sentiment.
The Dow has now had triple digit moves in 19 of the past 26 sessions dating back to April 27. In the month prior to that date, the Dow had only two triple-digit moves.
European stocks surged in morning trading and Asian stocks ended sharply higher across the board as confidence in the economic recovery returned.
The euro rose against the dollar, which edged higher against a basket of foreign currencies. Credit spreads tightened, with three-month Libor rising to 0.5378 percent and the Ted spread, or the difference between Libor and the three-month Treasury note, increasing to 0.3958 percent.
JPMorgan has been fined $49.12 million by the UK's industry watchdog, the Financial Services Authority, for not protecting client money over a period of seven years. The fine is the largest the FSA has ever handed out.
BPcontinues its attempt to slow oil spewing from its leaking pipe in the Gulf, with only halting progress being made as oil washes ashore in Alabama and Mississippi. Both Fitch and Moody's slashed their credit ratings on BP.
Major retailers reported their May salesthis morning, with mixed results.
Macy's , Gap and Saks all beat expectations, while Costco and Target fell short of forecasts.
Fed chairman Ben Bernanke is set to deliver a speech at 11:15 am in Detroit at a conference on small business financing. Fed bank presidents Hoenig, Rosengren, Lockhart, and Fisher also have speeches at various times throughout the day.
Ahead of the weekend meeting of G20 nations, British finance minister George Osborne said China's yuan will be a topic of discussion, while a variety of participants, including U.S. Treasury Secretary Tim Geithner, say a deal on a specific bank bailout "tax" is highly unlikely at the gathering.
Meanwhile, the Wall Street Journal is reporting that Nielsen Holdings, the largest provider of TV ratings, is planning to file for an IPO soon.
And Facebook CEO Mark Zuckerberg told the All Things Digital Conference that he has no particular date in mind to take his company public.
Still to Come:
THURSDAY: May chain-store sales; Blagojevich trial begins; Fed's Lockhart, Hoenig speak; factory orders, ISM services index
FRIDAY: May jobs report; Fed's Lockhart speaks; Walmart shareholder meeting; Sprint's first 4G phone goes on sale
More From CNBC.com: