Stocks rose on Wednesday, continuing a strong start to September for the market as traders took profits out of high-flying names like Apple and Tesla and snapped up shares in more beaten-down parts of the market.
The Dow Jones Industrial Average advanced 213 points, or 0.8%. The S&P 500 gained 0.6% while the Nasdaq Composite was flat.
Coca-Cola rose more than 2% along with Intel and IBM to lead the Dow higher. However, all three of those stocks are still down year to date. Apple and Tesla slid 3% and 6.9%, respectively, giving back some of their recently sharp gains. The iShares Russell 1000 Value ETF (IWD) rose 0.9% while its Growth counterpart, the IWF, dipped slightly.
The major U.S. averages rose even after the release of disappointing economic data. ADP said U.S. private payrolls grew by 428,000 in August. Economists polled by Dow Jones expected a gain of 1.17 million.
Peter Boockvar, chief investment officer at Bleakley Advisory Group, said the pace of hiring “has really slowed down over the past two months where the average is just 320k.”
“This print makes Friday’s BLS report really interesting because not only was the private sector BLS July print 1.46 million but the August estimate is 1.29 million, well different and well above than what ADP has said,” added Boockvar.
Wall Street was coming off a banner session in which the S&P 500 and Nasdaq closed at record highs. The S&P 500 also logged in its best first trading day of September since 2010, according to Bespoke Investment Group.
Morgan Stanley Chief U.S. Equity Strategist Mike Wilson said Tuesday on “Closing Bell” that he was still optimistic about the market long-term but that weakness in the weeks ahead was on the table after such a strong rally.
“I remain very constructive over the next 12 months,” Mike Wilson said. “I think we’re a little bit overcooked … It’s impossible to try to time these types of corrections,” Wilson said. “It would not surprise me if we got a 10% correction, but it wouldn’t be surprising if we didn’t, either. We’re in a bull market.”
In Washington, Congressional leaders appear to be far apart in negotiations for another relief package, but the Trump Administration announced on Tuesday evening that the Centers for Disease Control and Prevention would invoke its authority to halt evictions through the end of the year.
The moves Wednesday also followed conflicting news in the fight against the coronavirus, with Swiss pharmaceutical firm Roche announcing that it would launch a new rapid antigen test in Europe by the end of the month. The company said it would apply for an emergency use authorization from the U.S. Food and Drug Administration.
However, an expert panel convened by the U.S. National Institute of Health said that a plasma treatment touted by President Trump and FDA head Stephen Hahn does not appear to be effective against Covid-19 based on current research.
Correction: This story has been updated to reflect the S&P 500 closed at a record on Tuesday. A previous version of this story incorrectly stated the Dow closed at an all-time high.
