Trading on Wednesday saw a limited rise in the United States stock index. This slight gain was fueled by the ADP private-sector employment report. ADP Employer Services showed that private employers in the United States added an additional 162,000 workers onto their payrolls. In September, employers added a total of 201,000 new workers. These numbers mark a much higher amount than leading analysts had expected. Although the employment outlook is still dim, the new jobs show that the unemployment rate is at least holding steady.
On Friday, the United States Labor Department will release their own data on unemployment in the United States. Since the ADP and the Labor Department have a weak month-to-month relationship, Friday’s numbers could still be quite different from the ADP private-sector employment report.
Futures on the Dow Jones Industrial Average gained a total of 13 points to settle at 13,424. On the Nasdaq-100, futures rose 6.75 points to 2,802. Meanwhile Standard & Poor’s 500 Index showed an increase of 1.8 points. By the end of Wednesday’s trading session, Standard & Poor’s 500 Index was at 1,442.70.
After three months of declines, the ISM index of purchasing managers posted gains on Monday. The stock market was further bolstered by expectations about business confidence. At 10 AM Eastern time, the Institute for Supply Management is expected to release their survey of business confidence in the United States’ service sector. Most analysts believe that the data should remain around 53.7 for September.
Around the world, other economic data released this week seems bleak. In the Eurozone, the composite purchasing managers’ index sank to a four-month low. This drop reflects the possibility that there will be a return to the recession during the third quarter. Another factor compiling Europe’s woes is the uncertainty surrounding the debt crisis in Spain. Although the government is expected to request a bailout this weekend, some government officials have denied this. Until a bailout agreement is finalized, investors will be hesitant to invest in Europe and Spain’s borrowing costs will remain exceptionally high. Due to the uncertainty in Spain, the Dow Jones Industrial Average dropped 32.75 points to 13,482.36 during trading on Tuesday.
In China, the non-manufacturing purchasing-managers index showed slight growth for the country. In August, the index was at 56.3. By September, it had fallen to 53.7. This drop shows a decrease in consumer sentiment for a third month in a row. Since the index is still above 50, China is still technically in a period of economic growth.
Best Buy Shares Rise
Founded by Richard Schulze, Best Buy Co. shares have gained in the last day. Reportedly, investment firms are looking to purchase the company for an amount as high as $11 billion. In response, more investors have become interested in purchasing shares in the company.
The United States chain, Family Dollar Stores Incorporated, also posted rising profits for the fourth quarter of 69 cents. The adjusted profit on each share was 75 cents. Over the fourth-quarter, sales have risen 11 percent while shares gained 3 percent since the announcement of the company’s profits. Total profit for the company was up 1.4 percent since it opened 500 additional stores.
According to some sources, Apple is expected to come out with a smaller version of their current tablet. Component suppliers in Asian are beginning to mass produce the new product. This development was first reported in the Wall Street Journal and marks one of the most recent product innovations by Apple.
Interestingly, a recent case against Apple has been dropped. Google’s subsidiary, Motorola Mobility had lodged a complaint against Apple for patent infringement. Without any reason for doing so, the case was dropped and is no longer being pursued.
The United Kingdom and France
Two companies in the United Kingdom saw their stocks rise as they await a possible merger. The European Commission has stated that they will decide the outcome of the proposed merger before November 8. In the meantime, Xstrata PLC saw its stocks gain 0.8 percent while shares in Glencore International PLC rose 0.9 percent.
The United Kingdom also saw Tesco PLC drop 1.2 percent following a lower than expected profit in the first quarter. This drop in profit was attributed to slower sales a turnaround plan. HSBC Holdings PLC was up 1.2 percent while the United Kingdom’s FTSE 100 index rose a slight 0.1 percent higher to end at 5,816.14.
Across the channel, Alstom SA gained 0.6 percent. The French industrial conglomerate recently signed a contract with Kazakhstan. Spanning the next 25 years, the contract covers the maintenance and modernization of locomotives by Alstom SA.
The CAC 40 index in France dropped slightly during Wednesday’s session by 0.1 percent. It is currently at 3,410.78. One loss in France was by a leading drug maker. Sanofi SA recently stated their agreement to buy a generic drug company in Columbia. After reports came out, the shares dropped a slight 0.5 percent.
In Germany, the DAX 30 index rose 0.3 percent to settle at 7,327.82. Individually, Deutsche Bank performed well during Wednesday’s session and gained a total of 2.4 percent.
Australian Deficit Rises
Previously, investors and Australian officials had expected the deficit to reach roughly $685 million. Instead, the Australian deficit ballooned to $2 billion in the month of August. As news of the rising deficit hit the markets, the Australian dollar received increased levels of pressure. To make the matter worse, the Reserve Bank of Australia decided to cut the cash rate by 25 basis points on Tuesday. This cut in the official rates fueled market speculation that the country may have to further reduce Australia’s rates in the coming months. After the tumultuous news from Australian, the Aussie barely managed to stay at $1.02 United States dollars.
In Asia, markets in Shanghai remained closed on Wednesday for a public holiday. During the trading session, Japan’s Nikkei fell 0.5 percent while the Hang Seng in Hong Kong gained a slight 0.1 percent. The Japanese yen also fell against the greenback.