Karen Herbst relays trade information to the S&P 500 futures pit at the Chicago Mercantile Exchange in hectic activity March 15, 2000.
After closing at a record high on Tuesday, the U.S. stock markets didn't do much.
First, the scoreboard:
- Dow: 16,360.1 (-35.7, -0.2%)
- S&P 500: 1,873.8 (-0.1, -0.0%)
- Nasdaq: 4,357.9 (+6.0, +0.1%)
And now the top stories:
- Today came with two important, albeit disappointing, U.S. job market indicators. First was ADP's National Employment Report, which estimated that U.S. private companies added only 139,000 payrolls in February. This was weaker than the 155,000 expected by economists. Even worse, January's number was revised down to 127,000 from 175,000. "Employment was weak across a number of industries," said Mark Zandi, chief economists of Moody's Analytics. "Bad winter weather, especially in mid-month, weighed on payrolls. Job growth is expected to improve with warmer temperatures."
- ADP's report was followed by ISM's non-manufacturing survey. The ISM's so-called services index fell to 51.6 in February from 54.0 in January. "What the heck is up with the supply management executives at non-manufacturing firms?" asked Chris Rupkey, chief financial economist of Bank of Tokyo-Mitsubishi. "Frozen in their tracks, the cold weather seems to have affected their judgment."
- The ISM services employment sub-index plunged to 47.5 in February from 56.4. A sub-50 reading signals contraction. Economists had difficulty squaring that circle. "[It] can’t easily be explained by the weather," said Paul Dales of Capital Economics. "It would make more sense for the bad weather to hit the new orders index, which actually rose a touch. Equally, however, none of the other incoming news suggests that the economy has been anywhere weak enough to warrant such a drop in employment."
- Barclays' Cooper Howes had another take on that stunning ISM services employment number. "This is its lowest level since 2010 and commentary from respondents suggests that some of this effect could be due to the implementation of the Affordable Care Act," said Howes. He was referring specifically to this anecdote from the health care and social assistance industry: "The Affordable Care Act is creating significant financial uncertainty to health care organizations. With little warning, the negative impact on revenue has been unprecedented."
- The Federal Reserve's Beige Book of economic anecdotes shed light on the impact of the harsh winter weather. Indeed, the word "weather" was used a whopping 119 times. "Eight Districts reported improved levels of activity, but in most cases the increases were characterized as modest to moderate," said the Fed. Retail sales and manufacturing activity were affected by the winter weather. Meanwhile, the districts reporting on agriculture complained about dry soil affecting wheat crops.
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