US close: Stocks finish shortened session with gains after poor data

dl wall street new york city wall st nyc new york stock exchange nyse nasdaq us usa united states of america trading finance unsplash — Sharecast / Roberto Junior via Unsplash

US stocks finished mostly higher after a shortened trading session with the S&P 500 and Nasdaq both hitting yet more record highs following a flurry of weak economic data which raised hopes that the Federal Reserve may start loosening monetary policy in September.

The Dow closed just 0.06% lower, but the S&P 500 rose 0.51% to a new high of 5,537.02 and the Nasdaq gained 0.88% to 18,188.30. The New York Stock Exchange closed at 1300 EDT and will remain closed on Thursday for Independence Day.

Investors were focusing on a continued increase in jobless claims and lower-than-expected private-sector payrolls on Wednesday.

"Overall, there is a growing body of evidence that the US economic data is turning lower and could point towards a potential recession later this year," said Kathleen Brooks, research director for XTB.

"It also puts the spotlight firmly on the September Fed meeting, when the market seems to think that the Fed could cut rates."

Economic data misses the mark

Private sector employment in the US rose less than expected in June, according to figures released on Wednesday by ADP. Employment increased by 150,000 from May, versus expectations for a 165,000 jump. May’s gain was revised to 157,000 from 152,000.

The Institute for Supply Management's service-sector purchasing managers' index fell from 53.8 for May to 48.8 in June, well below the 52.5 expected by the market.

Jobless claims rose 4,000 last week to 238,000 from the previous week's upwardly revised level of 234,000, remaining near the ten-month high of 243,000 earlier in June, according to the Labor Department.

Mortgage applications fell 2.6% in the week ended 28 June, according to the Mortgage Bankers Association of America.

Job cuts fell 23.6% in June to 48,786, but remained 19.8% higher than June 2023, according to Challenger Gray & Christmas. It was the highest tally for a June since 2020.

America's trade deficit in goods widened to $100.62bn in May, according to the Census Bureau, the largest reading in two years and following a downwardly revised print of $97.95bn in the previous month.

Market movers

Paramount Global jumped 7% on the back of reports that Skydance Media has struck a preliminary agreement to snap up controlling shareholder National Amusements.

Amazon.com finished lower on the back of a recent filing that revealed founder and executive chair Jeff Bezos intends to sell $5bn of shares this year.

Quest Diagnostics rose strongly after agreeing to buy LifeLabs, a Canadian provider of community laboratory tests, for about $985m including debt.

Dow Jones - Risers

Salesforce.Com Inc. (CRM) $260.95 1.86%
McDonald's Corp. (MCD) $250.04 0.89%
Caterpillar Inc. (CAT) $330.61 0.87%
Walt Disney Co. (DIS) $98.61 0.63%
Apple Inc. (AAPL) $221.55 0.58%
Intel Corp. (INTC) $31.23 0.51%
Goldman Sachs Group Inc. (GS) $467.92 0.50%
Microsoft Corp. (MSFT) $460.77 0.32%
Dow Chemical Co. (DOW) $52.88 0.32%
Coca-Cola Co. (KO) $63.33 0.29%