Wall Street Climbs as Data Stoke Recovery Hopes; Fed Minutes Eyed

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Investing.com – Wall Street made a positive start to the third quarter as improving jobs and manufacturing data boosted investor hopes the economic recovery remains intact at a time when rising virus cases threaten the outlook.

The S&P 500 gained 0.56%, while the Nasdaq Composite added 0.70% and the Dow Jones Industrial Average was flat.

Private payrolls grew by 2.4 million in June, while May’s figure was revised higher to 3 million, according to a report released Wednesday by ADP and Moody’s (NYSE:MCO) Analytics. That missed economists’ forecast for a rise of 3 million.

The private jobs data come ahead of the crucial nonfarm payroll report for June. Economists’ are forecasting that the economy generated 3 million jobs last month, but that “seems aggressive, and sets the bar very high,” Jefferies (NYSE:JEF) said. “We see risks skewed to the downside.”

On the manufacturing front, ISM manufacturing data  for June showed an uptick to 49.8, beating expectations of 49.6. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy.

The sharp rebound in manufacturing following the slump in April and May was led by strong improvements in the new orders and production indexes and paves the way for a solid month in July, but the path beyond will depend on the evolution of the coronavirus outbreak, Jefferies added.

With many states including Texas, California, Florida, and New Jersey recently scaling back efforts to reopen businesses, the reopening trade came under pressure with energy and financials leading to the downside.        

Energy fell 2%, shrugging off rising oil prices as worries over crude demand weighed on sentiment despite data showing U.S. crude stockpiles fell by 7.2 million barrels last week.

Rising mega-cap tech stocks supported the broader market, led by Facebook (NASDAQ:FB) as the social media giant – taking steps to address recent concerns — offered to meet with boycott organizers.

Other FAANG names were also higher, with Netflix (NASDAQ:NFLX) the standout performer, up 5%.

In other news, FedEx (NYSE:FDX) reported fiscal fourth-quarter results that beat on both the top and bottomed lines, sending its shares 12% higher. 

Investor attention will shift to clues on monetary policy later, with the minutes from the most recent Federal Reserve policy meeting, due at 2:00 PM ET.

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