On the last day of one of the most tumultuous months for equities this year, the only dip in stocks came from the telecommunications sector, which was dragged down nearly 3 percent by shares of ATT after the news broke that the United States Justice Department would seek to block its proposed acquisition of T-Mobile USA.
Otherwise, new data on factory orders and jobs set investors up for a higher trading session that carried over gains from markets in Asia and Europe. The markets finished higher on Tuesday, despite reports on consumer confidence and housing that showed a mixed economic recovery.
On Wednesday, the three main indexes were more than 1 percent higher in the first hour of trading, although their gains were soon tempered by the news of government efforts to block ATT’s $39 billion acquisition of T-Mobile, which would create the largest carrier in the country.
In early afternoon trading, ATT shares dipped more than 4 percent, dragging down the overall telecom sector by about 1.5 percent. A rival, Sprint Nextel, was up by more than 7 percent and was the most widely traded share in that sector.
The news about ATT came at the end of a month characterized by high volatility, as choppy economic data renewed discussions about whether the economy was headed for another recession. Concerns about euro zone debt problems and fiscal uncertainty in the United States were among the factors adding to the rough trading.
Wild swings of hundreds of points have set back the three main indexes 3 to 5 percent in the month to date. But on Wednesday, the Dow gained enough ground to turn positive for the year, and in the early afternoon was up 86.96 points, or 0.8 percent, to 11,646.91. The Standard Poor’s 500-stock index, up almost 0.9 percent, and the Nasdaq composite index, up 0.5 percent, were still negative for the year through August, however.
The gains were played out in a market that has been oversold in the past month, said Anthony G. Valeri, a senior vice president and market strategist for LPL Financial.
“It was due for a bounce,” he said of Wednesday’s trading. Whether the gains can be sustained, though, “depends on data and events out of Europe,” Mr. Valeri said.
On Wednesday, a report from the United States Commerce Department showed that factory orders for July rose sharply, at 2.4 percent the largest increase since March. Demand for automobiles and commercial airplane orders propelled the orders.
A report on jobs on Wednesday, this one from ADP Employer Services, showed new jobs on private payrolls totaled 91,000 for August, below forecasts.
Those reports were released ahead of one of the most closely watched data releases the Labor Department’s national report on the job situation on Friday. Analysts were forecasting 70,000 in new nonfarm payroll jobs for August, compared with 117,000 the previous month, while the unemployment rate of 9.1 percent was not expected to change, according to a survey by Bloomberg News. “We are still not seeing job losses, which is what you would see in a recession,” Mr. Valeri said.
Goldman Sachs economists said in a research report that the A.D.P. report, which is used to help estimate the outcome of the national report, could mean lower forecasts for Friday’s numbers.A Federal Reserve report this week that said policy makers earlier this month considered changing the size or composition of the Fed’s balance sheet and reducing the interest rate paid on banks’ excess reserve balances has refocused investors’ attention on the Fed’s next meeting in September. Fed policy makers have agreed to consider other options at that meeting. But some analysts said the Fed might need more information before deciding on further stimulus.
“I think the Fed will want to see more data to prove inflation is stabilizing and the economy might be weaker than expected,” said Mr. Valeri.
The yield on the Treasury’s benchmark 10-year note was little changed at 2.195 percent.
Crude futures for October traded in New York were up 46 cents, or 0.5 percent, to $89.36 a barrel. Gold on the Comex was up 0.4 percent at $1,834 an ounce.
In Europe, Britain’s FTSE 100 and Germany’s DAX each gained 2.4 percent. In Paris, the CAC 40 rose 3.1 percent. Asia closed broadly higher.
Article source: http://feeds.nytimes.com/click.phdo?i=ed77311c76998c66dd157a38b2cfbb21
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