Stock Market News for Dec 7, 2023

Market News

Wall Street ended lower on Wednesday, dragged down by the energy stocks. Market participants digested ADP data and waited for labor market data scheduled for release later this week. All three major indexes ended in red.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.2%, or 70.13 points, to close at 36,054.43. Notably, 19 components of the 30-stock index ended in negative territory, while 11 were in green.

The tech-heavy Nasdaq Composite declined 0.6% to close at 14,146.71.

The S&P 500 fell 0.4% to end at 4,549.34. Out of 11 broad sectors of the benchmark, seven ended in negative territory, while four finished in green. The Energy Select Sector SPDR (XLE), the Technology Select Sector SPDR (XLK) and the Financials Select Sector SPDR (XLF) declined 1.5%, 0.9% and 0.5%, respectively, while the Utilities Select Sector SPDR (XLU) advanced 1.3%.

The fear-gauge CBOE Volatility Index (VIX) increased 0.9% to 13. A total of 11.3 billion shares were traded on Wednesday, higher than the last 20-session average of 10.7 billion. The S&P 500 posted 29 new 52-week highs and no new lows. The Nasdaq Composite recorded 99 new highs and 93 new lows.

ADP Private Payrolls Report Drives the Market

Automatic Data Processing’s ADP National Employment Report for November was released on Wednesday. According to the report, there was an increase of 103,000 jobs in payrolls month. The previous data of jobs added for October was revised from 113,000 to 106,000. The slowdown in the labor market is noticeable after the Federal Reserve implemented a series of interest rate hikes totaling 525 basis points since March 2022.

Currently, financial markets reflect a sentiment that suggests a belief in easing labor market conditions and decreasing inflation. This leads to speculation that the Federal Reserve’s tightening monetary policy may be coming to an end, and there could be potential for a rate cut in March. Investors are eagerly awaiting data on claims and key statistics regarding nonfarm payrolls, wages and unemployment in order to gain an understanding of overall market dynamics in the upcoming days.

Gas Prices Hit 11-Month Low

U.S. Crude oil declined on Wednesday. The West Texas Intermediate contract for January saw a drop of $3.14 or 4.34%, settling at $69.14 per barrel. Similarly, the Brent crude contract for February experienced a decrease of $3.06 or 3.96%, reaching $74.14 per barrel. Concurrently, U.S. pump prices have mirrored the downward trend in oil prices, averaging $3.22 per gallon as of Wednesday, marking the lowest price since Jan 3, as reported by AAA (the American Automobile Association, Inc.)

The decline in oil prices can be attributed to production levels in OPEC countries, particularly the U.S., along with concerns about a potential economic slowdown occurring in China. As a result, energy stocks took a hit, with the S&P Energy SPDR declining by 1.5%.

Consequently, shares of Halliburton Company HAL and EQT Corporation EQT fell 3.6% and 3.9%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

Per a government report, for the week ended Dec 1, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.6 million barrels from the previous week.

U.S. trade deficit rose in October to $64.3 billion or 5.1%.

Nonfarm productivity in third-quarter 2023 was revised upward to 5.2.7% from 4.7% reported earlier. Unit labor costs decreased by 1.2% in the quarter. Earlier, the number was 0.8%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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