US equity indexes rose in choppy trading after midday on Wednesday ahead of the Federal Reserve’s December meeting minutes as job openings fell less than forecast while a manufacturing gauge sank deeper into contractionary territory.
The Nasdaq Composite rose 0.9% to 10,483.5, while the S&P 500 advanced 1% to 3,862.1. The Dow Jones Industrial Average was 0.6% higher at 33,321.4. All three indexes were down earlier in the session. All sectors were in the green, with real estate, financials, and consumer discretionary in the lead intraday.
The US 10-year yield slumped 6.8 basis points to 3.72%, and the two-year rate declined 3.7 basis points to 4.37%.
The Institute for Supply Management’s US manufacturing index declined to 48.4 in December from 49 in November, versus expectations for 48.5 in a survey compiled by Bloomberg. A print below 50 indicates contraction. There were decreases in the readings for new orders, production and prices paid, but a solid increase for employment.
US job openings fell to 10.46 million in November from 10.51 million in October, according to the Bureau of Labor Statistics, but the level was still above the 10.03 million anticipated in a poll compiled by Bloomberg. According to a note from Jefferies, the quit rate ticked up to 2.7 from 2.6, the first increase since February.
The data was “very strong, showing no improvement in the labor imbalance,” Jefferies economists Aneta Markowska and Thomas Simons said in the note. “This reinforces the notion that labor demand is still outstripping supply, which means wage pressures are unlikely to ease as quickly as” the Federal Reserve and markets would like.
Later on Wednesday, the Federal Reserve will release the minutes of the Federal Open Market Committee’s latest policy meeting held on Dec. 13-14.
West Texas Intermediate crude oil futures plunged 4.2% to $73.75, following a warning from the International Monetary Fund managing director Kristalina Georgieva that the economies of the US and European Union will slow this year. In China, coronavirus continues to spread as the country steps away from its zero-COVID-19 policy.
In company news, Chinese technology stocks rose following a Bloomberg report that Beijing is looking to remove quarantine requirements for foreign travelers. JD.Com (JD) surged 14%, with Baidu (BIDU) 9.9% higher and Pinduoduo (PDD) up 8.9% intraday, the top gainers on the Nasdaq.
UBS downgraded Microsoft (MSFT) to neutral from buy, while cutting its price target to $250 from $300. Shares declined 4.4%, among the steepest decliners on the S&P 500, the Nasdaq, and the Dow.
The US Dollar index depreciated 0.3% to 104.16 intraday.
Gold was up 1% to $1,863.71 and silver was 1.3% lower at $23.92.