Wall Street advanced, pushing the Standard & Poor’s 500 Index to a record high, as the US services industry posted its highest reading in nine months.
The Institute for Supply Management’s non-manufacturing index rose to 56.3 in May, up from 55.2 in April. Separately, the US trade deficit rose 6.9 percent to US$47.2 billion in April as imports increased.
To be sure, US private employers added a lower-than-expected 179,000 jobs to their payrolls in May, down from 215,000 in April, according to the ADP national employment report. A Labor Department report on Friday is expected to show that US employers added 215,000 jobs in May, according to a Bloomberg News survey.
"May job growth may have been a little less than expected but with imports rising, it looks like the economy is moving forward solidly," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters.
In the final hour of trading in New York, the Dow Jones Industrial Average edged 0.04 percent higher, the Standard & Poor’s 500 Index rose 0.14 percent, and the Nasdaq Composite Index added 0.37 percent. The S&P 500 touched a record 1,928.63 earlier in the session.
Gains in shares of Travelers, up 1.3 percent, and those of Nike, up 0.8 percent, offset declines in shares of Cisco, down 1.1 percent, and those of United Technologies, down 0.8 percent.
The S&P 500 has risen more than 6 percent since falling to a two-month low in April as investors ditched an array of momentum stocks. So far this year, the index is up 5.2 percent. In comparison, the Dow is up just 2.1 percent this year; the Nasdaq is up 2.3 percent.
In Europe, the Stoxx 600 Index inched higher to close the session at 343.56. Germany’s DAX rose 0.07 percent. France’s CAC 40 slipped 0.06 percent, while the UK’s FTSE 100 shed 0.3 percent.
European Central Bank policy makers meet on Thursday and are widely expected to announce stimulus measures including a reduction of the central bank's key interest rate.
A report released on Wednesday showed gross domestic product in the euro zone grew 0.2 percent in the first quarter, down from a revised 0.3 percent increase in the previous three months.
Analysts are concerned about the spectre of deflation in the region. A report earlier this week showed that the pace of inflation fell to 0.5 percent last month.
“We see a significant risk of a fall below zero,” Jennifer McKeown, an economist at Capital Economics in London, referring to the inflation rate, told Bloomberg News. “While the ECB looks set to cut interest rates and announce some lending incentives after its meeting, we think that it will ultimately need to implement a large scale quantitative-easing program to counter the growing risk of deflation.”
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Listen to the week’s top business news on NBR Radio’s week in review
- Matthew Hooton on Winston Peters’ plan to become prime minister
- Tim Hunter asks: Is the government planning to hand control of water to iwi?
- Rob Hosking breaks down the political and economic week that was: Has everyone gone tax mad?
- Rodney Hide on the technological development and economic advance in transport