U.S. Stocks Turning In Lackluster Performance Following Mixed Jobs Data

Stocks have shown a lack of direction over the course of the trading day on Wednesday, with the major averages bouncing back and forth across the unchanged line following the sharp pullback seen in the previous session.

Currently, the major averages are posting modest losses. The Dow is down 35.82 points or 0.1 percent at 42,492.53, the Nasdaq is down 15.64 points or 0.1 percent at 19,474.04 and the S&P 500 is down 2.12 points or less than a tenth of a percent at 5,906.91.

The choppy trading on Wall Street may partly reflect uncertainty about the outlook for interest rates following the release of mixed U.S. jobs data.

While payroll processor ADP released a report showing private sector job growth slowed more than expected in December, the Labor Department released a report showing weekly jobless claims unexpectedly fell to their lowest level in almost eleven months.

ADP said private sector employment rose by 122,000 jobs in December after climbing by 146,000 jobs in November. Economists had expected private sector employment to grow by 140,000 jobs.

The report said hiring slowed in several industries, while employment in the manufacturing sector shrank for the third straight month.

“The labor market downshifted to a more modest pace of growth in the final month of 2024, with a slowdown in both hiring and pay gains,” said ADP Chief Economist Nela Richardson.

Meanwhile, the Labor Department released a separate report unexpectedly showing another modest decrease by initial jobless claims in the week ended January 4th.

The report said initial jobless claims slipped to 201,000, a decrease of 10,000 from the previous week’s unrevised level of 211,000. Economists had expected jobless claims to rise to 218,000.

With the unexpected dip, jobless claims fell to their lowest level since hitting 200,000 in the week ended February 17, 2024.

The Labor Department is scheduled to release its more closely watched monthly jobs report on Friday, potentially providing additional clarity about the strength of the labor market.

Later in the day, the Federal Reserve is due to release the minutes of its latest monetary policy meeting, which may also provide clues about the outlook for interest rates.

Sector News

While many of the major sectors are showing only modest moves, airline stocks have shown a significant move to the downside, dragging the NYSE Arca Airline Index down by 1.9 percent.

Considerable weakness is also visible among computer hardware stocks, as reflected by the 1.8 percent loss being posted by the NYSE Arca Computer Hardware Index.

Steel, networking and utilities stocks are also seeing notable weakness, while gold stocks have moved higher along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. Japan’s Nikkei 225 Index dipped by 0.3 percent and Hong Kong’s Hang Seng Index slid by 0.9 percent, while South Korea’s Kospi jumped by 1.2 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index is down by 0.9 percent, the German DAX Index is down by 0.4 percent and the U.K.’s FTSE 100 Index is down by 0.2 percent.

In the bond market, treasuries have bounced back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.683 percent.