US: Stocks decline, snapping two-day winning streak

WALL STREET stocks finished a volatile session modestly lower on Wednesday (Sep 5), snapping a two-day winning streak following solid US economic data.

US private employment increased by 208,000 last month as schools reopened and pandemic concerns receded, with hiring accelerating after a slowing in August, according to data from payroll firm ADP.

The report comes ahead of Friday’s key government jobs release, which will be scrutinised for its implications for Federal Reserve interest rate hikes.

The Dow Jones Industrial Average slipped 0.1 per cent to close at 30,273.87.

The broad-based S&P 500 declined 0.2 per cent to 3,783.28, while the tech-rich Nasdaq Composite Index dropped 0.3 per cent to end the session at 11,148.64.

The Fed has been aggressively hiking interest rates to combat elevated inflation, a dynamic that has seen equity investors welcome signs of slower US growth.

The Institute for Supply Management’s services index ticked down to 56.7 per cent last month, slightly below August but well above the 50-per cent threshold indicating growth.

Recent data showing signs of an economic slowdown had raised hopes the US central bank might ease off its aggressive posture.

But “the economy is too strong for the Fed to pivot”, Oanda analyst Edward Moya said. “Deteriorating economic data is needed to drive down inflation and for the Fed to consider a slower pace of tightening.”

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Among individual companies, Twitter fell 1.3 per cent after jumping more than 20 per cent Tuesday following the revival of Elon Musk’s bid to acquire the social media company.

Petroleum producers Devon Energy and Occidental Petroleum jumped more than 2 per cent after the Opec cartel and a group of 10 other oil exporters led by Russia agreed to reduce oil output by two million barrels a day from November. AFP