Major market indexes closed Wednesday’s session higher as US service activity unexpectedly rose in July and as new orders for US factory goods topped expectations.
The Dow Jones Industrial Average climbed 1.3% to 32,812.50, the S&P 500 was up 1.6% to 4,155.17, and the Nasdaq Composite 2.6% higher at 12,668.16.
All sectors posted gains, with only energy in the red. Technology was the best performing sector.
The Institute for Supply Management’s US services index rose to 56.7 in July from 55.3 in June, compared with expectations for a decline to 53.5 in a survey compiled by Bloomberg. The prices paid index declined but still indicates rapid price acceleration.
Earlier, the S&P Global nonmanufacturing index was revised slightly higher in July to 47.3 from the flash 47 estimate but was still below the 52.7 reading in June.
New orders for US factory goods rose by 2% in June, ahead of expectations for a 1.9% increase in a survey compiled by Bloomberg and following a 1.8% gain in May. Factory shipments rose by 1.1% and factory inventories increased by 0.4%.
St. Louis Federal Reserve President James Bullard told CNBC Wednesday morning that he doesn’t think the US is currently in a recession and that rate hikes to tame high inflation will continue. CNBC’s report said that If Bullard has his way, the rate could continue rising to a range of 3.75%-4% by the end of the year, up from the current 2.25% to 2.5% range.
The US 10-year yield rose 2.5 basis points to 2.72% after touching its lowest level since early April on Monday.
West Texas Intermediate Crude fell 3.8% to $90.81 a barrel. Total crude oil inventories fell by 200,000 barrels in the week ended July 29, with commercial oil inventories up 4.5 million barrels and stocks in the US Strategic Petroleum Reserve down 4.7 million barrels. Gasoline inventories rose slightly, but distillate stocks declined.
In company news, Moderna (MRNA) maintained the 2022 sales guidance for its COVID-19 vaccine despite a pullback in deliveries to a global vaccine-sharing initiative after the drugmaker’s second-quarter results beat estimates. Shares surged 16%, the most on the S&P 500 and Nasdaq 100.
The second-biggest performer on the two indices was Paypal (PYPL), with shares up 9% after the firm reported a drop in adjusted earnings to $0.93 per share in the second quarter from $1.15 a year ago but still beat the $0.87 consensus.
Match Group (MTCH) reported a second-quarter loss of $0.11 per share, reversing earnings of $0.46 per share a year ago and missing expectations for earnings of $0.53 per share. The stock plunged nearly 18%, the worst performer on the Nasdaq 100.
Gold was down 0.4% to $1,782.00 per troy ounce, and silver was down 0.5% to $20.04 per ounce.
