Highlights
Major stock indexes recovered from early modest declines to end slightly better for a third straight day on Wednesday as investors appear unfazed by a government shutdown and by a surprisingly weak employment report. The Dow Jones industrial average firmed 0.1 percent, the S&P 500 rose 0.3 percent to set a new closing record, and the Nasdaq was up 0.4 percent. US Treasury yields, the dollar, and oil prices all slipped.
The government shutdown arrived at midnight on Tuesday night as Democrats and Republicans traded recriminations and made no moves toward a plan to fund the government. Investors regard the prospect of a lengthy shutdown as a negative for the economy, and bond yields declined in response, which in turn helped several megacaps outperform to support the major averages. News of an 32,000 decline in jobs in the ADP private payrolls, below expectations for a 50,000 increase on the month, fed the view that the economy is slowing and rate cuts are coming.
Best sectors included information technology, consumer discretionary and health care, with pharma lifted by another rally in Pfizer after it reached a deal with President Trump on pricing for certain drugs. Lagging sectors included financials, industrials, materials and energy.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.