Wall Street flat as data offsets commods decline
US stock indexes struggled near breakeven on Wednesday as investors were encouraged by strong data on new private-sector jobs and the services sphere, but weak commodity prices dragged down energy and materials shares.
January 06, 2011 / 08:46 IST
US stock indexes struggled near breakeven on Wednesday as investors were encouraged by strong data on new private-sector jobs and the services sphere, but weak commodity prices dragged down energy and materials shares.
Housing and financial stocks edged higher after a report showed a surprise surge in private-sector employment, nearly triple forecasts. The PHLX housing index rose nearly 1% and the S&P financial sector was up 0.5%."The jobs number looked like quite a change from the last one," said Peter Tuz, president at Chase Investment Counsel of Charlottesville, Virginia. "It's another sign the economy is recovering in fits and starts."In other data, the Institute for Supply Management reported the services sector grew in December at its fastest pace in more than 4 years.The Dow Jones industrial average fell 22.78 points, or 0.19%, to 11,668.40. The Standard & Poor's 500 dipped 1.60 points, or 0.13%, to 1,268.60. The Nasdaq Composite gained 1.57 points, or 0.06%, to 2,682.82.Energy shares led declines as crude continued to slide, with the S&P energy index down 0.7%. Dow component Alcoa Inc dropped 1.6% to USD 16.25. Oil futures were off nearly 1 percent to $88.50 a barrel.The US dollar rose 1.1% against a basket of currencies, sapping investor appetite for commodities and other risky assets.Commodities led the late-2010 rally, so some correcting is not unexpected as investors reallocate in the new year, Tuz said.The ADP data comes ahead of the widely followed government non-farm payrolls report due Friday, with economists expecting that the economy created 140,000 jobs last month.Shares of Family Dollar Stores Inc dropped 7.5% to USD 45.63 after the discount chain reported first-quarter earnings that missed expectations.Portugal cleared its first funding hurdle of 2011 on Wednesday, keeping short-term borrowing costs within expected limits, but investors still uneasy over euro zone debt troubles that have weighed on the single currency and global equity markets. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
