U.S. stock markets closed mixed on Wednesday. Market participants’ enthusiasm on strong earnings results were partially offset by concerns about higher inflation and a hike in the benchmark interest rate. Economic data were also mixed. The Dow and the S&P 500 ended in green while the Nasdaq Composite finished in red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was up 0.3% to close at 34,230.34, marking a fresh closing high. In intraday trading, the blue-chip index recorded a new all-time high of 34,331.20. Notably, 18 components of the 30-stock blue-chip index ended in the green while 12 in red.
The tech-heavy Nasdaq Composite finished at 13,582.42, dropping 0.4% due to weak performance by large-cap technology stocks. Investors remained concerned about earlier-than-expected hike in the benchmark interest rate, which is detrimental to growth-sectors like technology.
Meanwhile, the S&P 500 rose 0.1% to end at 4,167.59. The Energy Select Sector SPDR (XLE) and the Materials Select Sector SPDR (XLB) rallied 3.2% and 1.3%, respectively, while the Utilities Select Sector SPDR (XLU) and the Real Estate Select Sector SPDR (XLRE) slid 1.7% and 1.5%, respectively. Notably, six out of eleven sectors of the benchmark index closed in the red while five in green.
The fear-gauge CBOE Volatility Index (VIX) was down 1.7% to 19.15. A total of 8.35 billion shares were traded on Wednesday, lower than the last 20-session average of 9.94 billion. Decliners outnumbered advancers on the NYSE by a 1.11-to-1 ratio. On Nasdaq, a 1.32-to-1 ratio favored declining issues.
Strong Earnings Results
General Motors Co.
GM
reported adjusted earnings of $2.25 per share for first-quarter 2021, breezing past the Zacks Consensus Estimate of $1.02. Higher-than-anticipated profits from its North America and International units drove this outperformance. (
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The Scotts Miracle-Gro Co.
SMG
came out with quarterly earnings of $5.64 per share, beating the Zacks Consensus Estimate of $5.51 per share. The company posted revenues of $1.83 billion for the quarter ended March 2021, surpassing the Zacks Consensus Estimate by 5.14%. (
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Barrick Gold Corp.
GOLD
came out with quarterly earnings of $0.29 per share, beating the Zacks Consensus Estimate of $0.26 per share. This compares to earnings of $0.16 per share a year ago. These figures are adjusted for non-recurring items. (
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Consequently, share prices of General Motors, The Scotts Miracle-Gro and Barrick Gold increased 4.1%, 6.3% and 1.1%, respectively. All three stocks carry a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Economic Data
The Institute of Supply Management reported that its services purchasing managers index (PMI) came down to 62.7% in April from 63.7% in March. The consensus estimate was 64.1%. Notably, any reading above 50 indicates expansions in services activities. On the other hand, IHS Markit reported that its service sector PMI jumped to 63.5% in April from 59.7% in March, marking its biggest monthly gain since the inception of this index in October 2009.
Automatic Data processing reported that private sector payrolls increased 742,000 in April. Pervious month’s data was revised upward to 565,000 from 517,000 reported earlier. Large companies added 277,000 new employees. Mid-sized businesses recruited 230,000 manpower. Small businesses hired 235,000 people. Manufacturers and construction companies together generated nearly 100,000 jobs.
The Energy Information Administration reported that the U.S. crude inventories fell by 8 million barrels for the week ended Apr. 30 to 485.1 million barrels. Crude oil exports increased to 4.1 million bpd, highest since March 2020. Moreover, refining output was at its highest since March 2020.
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