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Nasdaq Reaches New Record Closing High But Dow Closes Modestly Lower

wallstreet2 01sep21 lt

Stocks saw strength for much of the session on Wednesday before giving back ground in the latter part of the trading day. Despite the late-day pullback, the tech-heavy Nasdaq ended the session at a new record closing high.

The major averages finished the day on opposite sides of the unchanged line. While the Dow edged down 48.20 points or 0.1 percent to 35,312.53, the Nasdaq rose 50.15 points or 0.3 percent to 15,309.38 and the S&P 500 inched up 1.41 points or less than a tenth of a percent to 4,524.09.

The lackluster close on Wall Street came as traders continued to look ahead to the release of the Labor Department's closely watched monthly jobs report on Friday.

Economists currently expect employment to jump by 750,000 jobs in August after surging by 943,000 jobs in July. The unemployment rate is expected to dip to 5.2 percent from 5.4 percent.

Meanwhile, traders largely shrugged off a report from payroll processor ADP showing much weaker than expected private sector job growth in the month of August.

ADP said private sector employment climbed by 374,000 jobs in August after rising by a downwardly revised 326,000 jobs in July.

Economists had expected employment to jump by 613,000 jobs compared to the addition of 330,000 jobs originally reported for the previous month.

"The Delta variant of COVID-19 appears to have dented the job market recovery," said Mark Zandi, chief economist of Moody's Analytics. "Job growth remains strong, but well off the pace of recent months."

A separate report from the Institute for Supply Management showed manufacturing activity in the U.S. unexpectedly grew at a slightly faster rate in the month of August.

The ISM said its manufacturing PMI inched up to 59.9 in August from 59.5 in July, with a reading above 50 indicating growth in the sector. The uptick surprised economists, who had expected the index to dip to 58.6.

Sector News

Interest rate-sensitive commercial real estate stocks showed a strong move to the upside on the day, driving the Dow Jones U.S. Real Estate Index up 1.6 percent to a record closing high.

Notable strength was also visible among interest rate-sensitive utilities stocks, as reflected by the 1.2 percent gain being posted by the Dow Jones Utilities Average.

On the other hand, oil stocks moved significantly lower weakness despite a modest increase by the price of crude oil, with the NYSE Arca Oil Index falling by 1.6 percent.

Banking stocks also came under pressure over the course of the session, resulting in a 1.4 percent drop by the KBW Bank Index.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index surged up by 1.3 percent, while China's Shanghai Composite Index climbed by 0.7 percent.

Most European stocks also moved to the upside on the day. The French CAC 40 Index jumped by 1.2 percent and the U.K.'s FTSE 100 Index rose by 0.4 percent, although the German DAX Index bucked the uptrend and slipped by 0.1 percent.

In the bond market, treasuries showed a lack of direction over the course of the session before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 1.302 percent.

Looking Ahead

Reports on weekly jobless claims, the U.S. trade deficit and factory orders may attract attention on Thursday, although trading activity is likely to remain somewhat subdued.

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