Wednesday, December 04 16:09:49
U.S. stocks edged higher in choppy trading today, after a mixed bag of economic data tempered recent expectations the U.S. Federal Reserve will wind down its massive stimulus earlier than expected.
The benchmark S and P 500 has fallen for the past three sessions and is on track to snap an eight-week winning streak during which it added nearly 7 percent. The recent decline came partly on concerns of an imminent wind-down of Fed stimulus.
Many market participants expect the Fed to announce a cut to its $85 billion in monthly bond purchases in March, but recent economic data had increased expectations among market participants the move may come sooner.
Sending stocks lower at the start of trading was a rosy ADP National Employment Report released today, which showed private employers added 215,000 jobs in November, topping economists' expectations of 173,000 jobs, with the prior month revised upward by 54,000 jobs.
Also lending some optimism for the economy was data showing the U.S. trade deficit narrowed in October while new home sales recorded their biggest increase in nearly 33-1/2 years in October suggesting the housing market recovery remains intact despite higher mortgage rates. The PHLX housing index edged up 0.05 percent.
But the economic picture was muddied after the Institute for Supply Management said its services index fell to 53.9 last month, from 55.4 in October and below a forecast for 55.0. The data dampened speculation the Fed would move up the timeline for a drawback in its stimulus and pushed equities into positive territory.
The Fed has said it would slow its stimulus program when certain economic measures meet its targets, including an improvement in the labor market.
"The data continues to be mixed. The Fed is not tapering in December the way everyone started to chatter the last couple of days and the market now realizes that," said Ken Polcari, Director of the NYSE floor division at O'Neil Securities in New York.
The Dow Jones industrial average rose 31.6 points or 0.2 percent, to 15,946.22, the S and P 500 gained 3.43 points or 0.19 percent, to 1,798.58 and the Nasdaq Composite added 13.138 points or 0.33 percent, to 4,050.336.