(New York) The New York Stock Exchange was trading slightly higher on Wednesday, coping rather well with new signs of a slowdown in the US jobs market, at the start of a truncated session preceding a public holiday.
In early trading, the Dow Jones was close to balance (+0.01%), the NASDAQ index was up 0.06% and the broader S&P 500 index was up 0.11%. The previous day, the NASDAQ and the S&P 500 had set new closing records.
“There’s not a lot of conviction” on Wall Street, “which is understandable given that many traders have already started their long weekend,” Patrick O’Hare of Briefing.com commented in a note.
Wednesday’s session will close at 1 p.m., reduced by three hours due to the proximity of the July 4 national holiday on Thursday, when the stock market will be closed.
Ostensibly in the red before the opening, the indices recovered after the publication of the report from the ADP consultancy, according to which the private sector created 150,000 jobs in June, significantly less than the 165,000 expected by economists.
“The deceleration reported by ADP makes sense, given the acceleration in layoffs and the deterioration in hiring indicators,” Ian Shepherdson of Pantheon Macroeconomics said in a note.
The observation was confirmed by the slight increase in new weekly unemployment registrations, to 238,000 compared to 234,000 the previous week.
The total number of people registered as unemployed is at its highest level in four months.
If the cooling of the jobs market remains gradual, “we must watch for possible signals of a more marked decline, which would have consequences for the monetary policy of the Fed” (American central bank), warned Rubeela Farooqi, of High Frequency Economics.
But as it stands, Wall Street has digested the day’s data well and seemed ready to seek new records, although the market is slowing down.
“The fact that the market is so firm before all of this suggests to me that buyers are still in control,” said Adam Sarhan of 50 Park Investments.
“We had every reason to fall back,” after the series of records in the spring, “but we evolved in fits and starts, which is very positive in this context.”
The bond market was factoring in the jobs data and the prospect of a future Fed rate cut. The yield on 10-year U.S. government bonds was 4.39%, down from 4.43% the previous day at the close.
Paramount Global’s share price soared (+9.79%) after several American media outlets reported an agreement to buy the entertainment group’s controlling holding company, National Amusements, by Skydance Media, which notably produced the series Impossible mission.
In a second step, Skydance would merge its activities with those of Paramount Global, which has been looking for a partner for many months.
Tesla maintained its momentum (+3.76%), the day after the announcement of better-than-expected quarterly sales figures in the United States. The stock has gained more than 40% since a low in early June.
Spirits group Constellation Brands was sought after (+0.84%) after reporting a better-than-expected net profit and raising its full-year guidance. The Rochester, New York-based company was driven by its beer sales, particularly Modelo, the best-selling brand in the United States.
The board of directors of Southwest Airlines (+0.57%) has put in place a mechanism called a “poison pill” to counter the increase in capital of the alternative investment company (hedge fund) Elliott, which already controls 11% of the company’s shares.
Southwest will grant holders a right to acquire additional shares if a shareholder exceeds the 12.5% threshold, which would dilute Elliott’s stake.