Market Wrap for Wednesday, July 3: Stocks Rise Modestly in Holiday-Shortened Session
The U.S. stock market rose on better than expected jobs data on Wednesday in a holiday-shortened trading session.
The markets will be closed on Thursday, July 4, for Independence Day. The gains were limited, but all three of the major averages closed the session higher, along with most commodities. Both bonds and the greenback closed the day lower.
The Dow Jones Industrial Average lost 56 points, or 0.38 percent, to 14,989.
The S&P 500 lost a little more than 1 point, or 0.08 percent, to 1,615.
The Nasdaq fell 10 points, or 0.30 percent, to close at 3,444.
ADP Employment Change
The ADP Employment report showed that the economy added 188,000 jobs for June compared to 134,000 in the prior month. This was well ahead of consensus expectations which called for a rise of 150,000 jobs.
Initial claims decreased from an 348,000 for the week ending June 15 to 343,000 for the week ending June 29. This compared to consensus expectations which expected initial claims to stay at 348,000.
Continuing claims fell from 2.987 million for the week ending June 8 to 2.933 million for the week ending June 15. This compared to the consensus which expected continuing claims to fall to 2.955 million.
The ISM Non-manufacturing index fell to 52.2 in June from 53.7 in May. This was the lowest reading for the index since February 2010, but recorded an expansion, nonetheless. The consensus expected the index to rise to 54.0.
Energy prices rose along with stocks on Wednesday. NYMEX crude futures had climbed 1.59 percent to $101.18. Brent crude contracts had added 1.63 percent to $105.69. Natural gas was last trading down 0.16 percent to $3.65.
Precious metals also climbed on the session. COMEX gold futures rose 0.80 percent to $1,253.40. Silver contracts were last up 2.10 percent to $19.72. Copper added around 1 percent and was last trading at $3.1740.
In the grains complex, corn fell on the session while wheat was higher. Near the close, corn was down 0.25 percent while wheat was up 1.25 percent. Movers in soft commodities included cocoa and lumber. Cocoa futures added 2.66 percent while wheat was up 3.36 percent.
Bond prices were slightly lower on the day. Heading into the closing bell, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) was down 0.16 percent to $110.17.
Bond yields were as follows on Wednesday: The 2-Year Note was yielding 0.35 percent while the 5-Year Note yield was sitting at 1.37 percent. The 10-Year Note and 30-Year Bond were yielding 2.47 percent and 3.47 percent, respectively.
The U.S. Dollar fell on the day. At last check, the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was trading down around 0.38 percent to $22.58.
The closely watched EUR/USD pair was last trading up 0.21 percent to $1.3004. Other movers included the USD/JPY, which fell 0.76 percent, and the GBP/USD, which was up 0.72 percent.
Volatility and Volume
The VIX was down slightly late in the session on Wednesday. At last check, the widely watched barometer of volatility expectations was down 0.43 percent to 16.37.
Volume was lighter than usual during the holiday-shortened session. Around 114.5 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands compared to a 3-month daily average of 144.6 million.
Shares of EXCO Resources (NYSE: XCO) were trading up around 8 percent near the close after the company announced a $1 billion acquisition of assets in the Eagle Ford and Haynesville shales.
EZCORP (NASDAQ: EZPW) was trading up around 7 percent late on Wednesday after the stock was upgraded from Neutral to Buy at Sterne Agee.
First Majestic Silver (NYSE: AG) was up around 7 percent late in the session on the back of strength in silver prices.
Rackspace Hosting (NYSE: RAX) rose almost 6 percent on the session. The stock has been rising off of 52-week low levels in recent days.
Linn Energy (NASDAQ: LINE) lost another 16 percent on Wednesday. The SEC announced an informal inquiry into the company on Tuesday.
Atlas Resource Partners (NYSE: ARP) fell almost 13 percent on the day. The reason for the move was not readily apparent.
Mead Johnson Nutrition (NYSE: MJN) lost 8 percent on Wednesday after China announced a probe investigating the company over baby formula price-fixing.
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