Wall Street Rally Paused After Strong Reports On Economy

Barry Adams
05 Oct, 2022
New York City

Benchmark indexes rebounded from the lows of the day and managed to trim session's losses. 

Popular indexes rested today after a two-day surge on the hopes that the central bankers around the world have gone too far with rate hikes. 

The optimism on slower future rate hikes reigned on Wall Street despite the private sector showed healthy gains in September and service sector expanded at a strong pace. 

The service Purchasing Managers' Index in September eased to 56.7 from 56.9 in August, according to ISM data released Wednesday. 

Private sector added 208,000 jobs in September from the revised 185,000 additions in August, the ADP reported Wednesday. 

Job gains of 147,000 in trade, transportation and utilities helped to offset 29,000 jobs lost in manufacturing and mining sectors. 

Professional and business services added 57,000 net new jobs.  

The ADP's report comes two days ahead of labor market report scheduled to be released by Department of Labor on Friday. 

Market is anticipating non-farm payrolls for private and public sector to add at least 270,000 in September. 

The S&P 500 index traded down 0.20% to 3,783.28 and the Nasdaq Composite index dropped 0.25% to 11,148.64.  

Crude oil surged as much as 2% after OPEC+ nations agreed to a 2 million a day production cut, larger than expected by analysts. 

US crude oil inventories decreased 1.356 million barrels to 429.2 million barrels in the week ended September 30th, according to the Energy Information Administration's weekly report released Wednesday.

Oil analysts were looking for the decrease to be at least 2 million barrels. 

Crude oil rose $1.36 to $87.87 a barrel and natural gas prices rose 12 cents to $6.96 a thermal unit. 

The yield on 2-year Treasury notes rose to 4.14%, 10-year Treasury notes inched up to 3.758% and 30-year bonds edged up to 3.76%. 

 

U.S. Trade Deficit Eased In September  

The trade deficit in August declined to $67.4 billion, the lowest since May 2021, the Bureau of Economic Analysis reported Wednesday.   

The goods deficit declined $3.4 billion to $87.6 billion and the services surplus narrowed by $0.4 billion to $20.2 billion. 

Imports in August fell 1.1% to $326.3 billion driven by the fall in imports of oil and fuel and computer parts. 

Exports declined 0.3% to $258.9 billion. driven by a decline in oil related products and travel services and non-monetary gold shipment. 

 

Prime Minister Truss Doubles Down, Pound Wobbles 

UK Prime Minister Liz Truss doubled down on her policy of cutting taxes and increasing government borrowing.