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U.S. stocks rose Wednesday, with the S&P 500 and the Dow Jones Industrial Average on track for record finishes on healthy economic data and optimism that the budget stalemate in Italy is likely to be resolved soon.
Gains were led by financials, industrials and energy sectors.
Where are the major benchmarks trading?
The Dow Jones Industrial Average
DJIA, +0.30%
rose 150 points, or 0.6%, to 26,925, on its way to its fifth straight session of gains and its 15th record close of 2018. The blue-chip average hit an all-time high of 26,951.81.
The S&P 500
SPX, +0.16%
climbed 12 points, or 0.4%, to 2,935 and the Nasdaq Composite Index
COMP, +0.42%
advanced 46 points, or 0.6%, to 8,046.
What’s driving markets?
Wall Street got an early lift after a report in Italian daily newspaper Corriere della Sera that the government may yield ground in a budget standoff with the EU, which could lessen the odds of a clash between the country and the bloc.
According to the report, Italy’s budget deficit target will be set at 2.4% of GDP in 2019, but decline to 2.2% in 2020 and 2.0% in 2021. Italian officials had previously clashed with Brussels over the budget deficit target, which exceeded EU rules and stoked fears of another crisis in the region.
While U.S. stocks have mostly shrugged off political uncertainties around the globe, a resolution in Italy would mean one less potential risk to watch out for.
On the economic front, private-sector employment soared in September, as employers added 230,000 jobs, more than had been expected, according to Automatic Data Processing Inc. The report is the first of three readings on the labor market that will be released this week. Thursday will see the latest data on jobless claims, while Friday has the closely watched September jobs report.
Separately, the final reading on the services sector from IHS Markit fell to 53.5 in September from 54.8, while the Institute for Supply Management’s reading on the nonmanufacturing sector came in at 61.6, above expectations for a reading of 58 and one of the highest readings in the history of the index.
A number of officials from the Federal Reserve were slated for public appearances, including Chicago Fed President Charles Evans, who reiterated his upbeat outlook for the economy and said the Fed would likely need to set monetary policy that prevent the economy from overheating.
In the afternoon, Cleveland Fed President Loretta Mester is scheduled to speak, as is Lael Brainard, a governor on the Fed’s board. Finally, Chairman Jerome Powell will speak at 4 p.m. ET. On Tuesday, Powell, reiterated that he did not see signs that inflation could spike despite the low unemployment rate.
What are market analysts saying?
“The impressive report shows investors how strong the U.S. economy is performing,” said David Madden, market analyst at CMC Markets.
Madden was referring to the ISM report, and added that the ADP figure “underlines there is still slack in the U.S. labor market. Traders will be looking ahead to the nonfarm payrolls report on Friday, and they will be paying close attention to the earnings component of the update, as that could be the clue to what the Federal Reserve are going to do next in terms of interest rate decisions.”
What stocks are in focus?
Facebook Inc.’s
FB, +2.31%
photo-sharing social network Instagram suffered a world-wide outage Wednesday but has since resumed service for most users, a glitch that comes just days after it named a new head of the app. Shares of Facebook rose 2.2%.
Shares of J.C. Penney Co. Inc.
JCP, +8.01%
rallied 9.6% a day after it said its board of directors has appointed retail veteran Jill Soltau as chief executive officer and a board member, effective Oct. 15.
Tempur Sealy International Inc.
TPX, +11.33%
shares jumped 12% following a report that rival mattress retailer Mattress Firm Inc. is close to filing for bankruptcy.
RPM International Inc.
RPM, -5.47%
fell 3% after it reported adjusted first-quarter earnings that missed expectations, but said revenue was ahead of forecasts.
Novartis AG
NVS, +1.54%
entered into a licensing and equity agreement with Boston Pharmaceuticals to develop three anti-infective drug candidates that are part of the Swiss company’s infectious diseases portfolio. U.S.-listed shares of Novartis gained 1.3%.
Where are other markets trading?
Asian stocks traded near break-even levels, recovering from early losses. Major European indexes rose, supported by optimism over Italy.
Crude-oil prices
CLK9, +1.63%
rose moderately while gold
GCM9, -0.50%
edged down. The U.S. Dollar Index
DXY, +0.31%
was slightly higher and the euro fell after an earlier lift from Italy.
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