Stocks wobbled in Wednesday’s session after a stronger-than-expected reading on hiring that countered other employment data pointing to a cooling job market. Rising tensions in the Middle East and a surging nonfarm payrolls report also weighed on gains in equities.
The jobs market – and its implications for the pace of interest rate cuts – was the main driver of the session after news that private payrolls expanded at a healthy clip last month.
Private employers added 143,000 jobs in September ADP National Employment Report. “Job creation has rebounded broadly after a five-month slowdown,” ADP said in a statement. The manufacturing sector added jobs for the first time since April, but only the information technology sector saw job losses last month.
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“So far, this week’s labor market data has been more resilient than most analysts expected,” wrote Chris Larkin, managing director of trading and investment. E* Trade. “Like yesterday’s job openings, today’s ADP employment numbers surprised the upside, the labor market is bent but not broken. But Friday’s monthly Jobs report will have the final say on the current jobs picture and will weigh heavily on near-term market sentiment.”
Stimulating a sluggish labor market The Federal Reserve implements a jumbo-sized rate cut last month, and market participants are trying to predict the pace of future reductions in borrowing costs. As of Oct. 2, futures traders were assigning a 65% chance of the central bank cutting the short-term federal funds rate by a quarter of a percentage point. Next Fed meetingAccording to CME Group FedWatch toolUp 43% from a week ago. The odds of a second half-point cut are at 35%, up from 57% last week.
“This morning’s ADP employment report adds credence to the argument that economic and labor conditions are solid, especially in light of yesterday’s upside to job prospects,” wrote senior economist Jose Torres. Interactive Brokers. “Of course, tomorrow’s reading on jobless claims and ISM services will provide more detail, but the main event will be Friday’s payroll jobs.”
At the closing bell, the blue chip The Dow Jones Industrial Average At 42,196 was less than one-tenth of a percent, but wide S&P 500 Essentially unchanged at 5,709. Tech-heavy Nasdaq Composite 17,925 added less than a tenth.
Stocks in motion
Lamb Weston ( LW ) stock later rose 2.6% The potato producer beat both top and bottom line expectations In its fiscal first quarter, it announced a restructuring plan and lowered its full-year profit forecast.
“Restaurant traffic and frozen potato demand, relative to supply, will continue to soften, and we believe this will continue to soften through fiscal 2025,” Lamb Weston CEO Tom Werner said in a statement. Advertisement.
As a result of the restructuring plan, Lamb Weston now expects earnings in the range of $4.15 to $4.35 per share, down from its previous estimate of $4.35 to $4.85. However, revenue is still expected to be between $6.6 billion and $6.8 billion.
human being (HUM) The stock fell 11.8% After the health benefits company announced preliminary 2025 Medicare Advantage Star Ratings data for its plans, the number of members enrolled in plans with ratings of four stars and above dropped significantly.
Humana said in a Regulatory Filing On Wednesday about 1.6 million, or 25% of its members are currently enrolled in MA plans that are rated four stars and above by 2025, down from 94% in 2024.
“A decline in STARS’ performance in 2025 could impact Humana’s quality bonus payments in 2026,” Humana said in the filing. “2025 star rating details are expected to be officially released by CMS on or around October 10th.”
Nike’s time is up
Nike (NKE) Worst show of all 30 Dow Jones stocks Today, the athletic apparel and footwear retailer fell 6.8% after reporting mixed results for its fiscal first quarter.
Making matters worse, the blue chip withdrew its full-year guidance and postponed its investor day.
The company disclosed this last month Elliott Hill becomes president and chief executive of Nike As of October 14, current CEO John Donahoe has been replaced. Hill spent 32 years at Nike in various roles before retiring in 2020 as president of its consumer and marketplace division.
“Due to our CEO transition and with three quarters remaining in the fiscal year, we are withdrawing our full-year guidance,” Chief Financial Officer Matthew Friend said in a statement. Advertisement. “This gives Elliott the flexibility to reconnect with our employees and teams, assess current strategies and business trends, and develop our plans to best position the business for fiscal 2026 and beyond.”
Wednesday’s drawdown wiped out about $9 billion in market cap, and Nike stock is now down 23% for the year. It lags the broader market by more than 40 percentage points. Although 2024 looks bleak, Wall Street sees brighter days ahead. The company’s brand leadership and the stock’s depressed valuation are just two contributing factors Analysts are mostly bullish on Nike.
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