EconomyEditor's PickNewsWall Street Opens Higher as ADP Report Dispels Debate Gloom; Dow up 250 Pts

2 years ago409 min
imageStock Markets14 minutes ago (Sep 30, 2020 10:18AM ET)

(C) Reuters.

By Geoffrey Smith — U.S. stock markets opened moderately higher on Wednesday, after a stronger-than-expected private payrolls report from ADP for September, coupled with another banner month for home sales, outweighed concerns about rising Covid-19 cases and the possibility of a disputed presidential election in November.

Comments from Treasury Secretary Steven Mnuchin talking up the possibility of a deal on a fresh fiscal support package also lifted spirits.

By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was up 250 points, or 0.9%, at 27,703 points. The S&P 500 was up 0.6% and the Nasdaq Composite was up 0.4%.

Earlier, ADP had reported that the U.S. private sector had added 749,000 jobs in the month through mid-September, while August’s job gains were also revised up to 481,000 from 428,000. The numbers suggest that the labor market’s rebound in the summer was stronger than initially thought, although whether it can sustain that strength as the coronavirus starts to regain momentum is another question. Walt Disney (NYSE:DIS) late on Tuesday announced it will cut 28,000 jobs at its theme parks and cruise operations in an apparent admission that neither will operate anywhere near full capacity for the foreseeable future.

Disney stock shrugged off premarket losses to trade down only 0.2%. but on a nationwide basis, new infections of Covid-19, which had fallen steadily since the end of July, have been rising more or less since the cut-off date for the ADP survey, while hospital admissions also appear to have turned upwards again.

The still-high level of unemployment – visible in the weekly jobless claims and set to be confirmed again in Friday’s official labor market report – has led most analysts and much of the Federal Reserve’s top brass to argue forcefully for more fiscal measures to support the economy. The Democrat-led House of Representatives and Republican-controlled Senate have haggled over a compromise for more than a month, both apparently content for the other to take the blame for the lack of progress.

“We’re going to give it one more serious try to get this done and I think we’re hopeful that we can get something done,” Treasury Secretary Mnuchin told a conference organized by CNBC on Wednesday.

Among individual stocks, Nextera Energy (NYSE:NEE) fell 2.8% after a Wall Street Journal report saying that it had been rebuffed in a bid for Duke Energy (NYSE:DUK). Duke stock rose 7.8% in early trading.

Chipmaker Micron Technology (NASDAQ:MU) fell 5.0% after it said in its quarterly update that it had failed so far to get government permission to sell certain highly-sensitive products to China’s Huawei.

Homebuilder Lennar (NYSE:LEN) stock rose 3.3% to a new all-time high after data showed pending home sales rose 8.8% in August. The numbers point to an ongoing boom in the housing market fueled by low interest rates and the desire of many people to lower their Covid risk and find more space outside densely-populated cities.

Wall Street Opens Higher as ADP Report Dispels Debate Gloom; Dow up 250 Pts

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