Stocks - Last-Ditch Selling Hits Dow; Traders Weigh Weak Jobs Data, Tech Strength

By Yasin Ebrahim

Investing.com – The Dow ended lower on Wednesday, as investors reined in their bullish bets on stocks ahead of the close on further signs of trouble in the labor market. But the ongoing rise in technology stocks kept losses in check.

The Dow Jones Industrial Average fell 0.91%%, the S&P 500 slipped 0.70%, while the Nasdaq Composite added 0.51%.

The underlying strength of the economy was given another gut check on Wednesday, as ADP reported that private labor jobs fell by 20.2 million last month, the worst decline on record.

The weakness in the labor market has added to investor fears the consumer will be cautious on spending at a time when many hope the lifting of restrictions around the country will kickstart economic growth.

Worries that the U.S. and China could be headed for a fresh collision course on trade also weighed on sentiment, with President Donald Trump expected to provide an update next week on whether China is sticking to its agreements under phase one trade deal agreed last year.

The update will come against the backdrop of the rising U.S.-Sino tensions as the Trump administration has threatened to impose tariffs on Beijing for its handling of the coronavirus.

Utilities, which usually serve as the defensive corner of the market, were among the worst hit, paced by declines from NiSource (NYSE:NI) and American Electric Power (NYSE:AEP) amid weaker-than-expected quarterly results.

The ongoing climb tech stocks, however, led by FAANG - with the exception of Google parent Alphabet (NASDAQ:GOOGL) - and chip stocks limited downside momentum in the broader market.

The Philadelphia Semiconductor Index climbed 1%, led by a surge in KLA-Tencor (NASDAQ:KLAC), Xilinx (NASDAQ:XLNX) and Applied Materials (NASDAQ:AMAT).

On the earnings front, meanwhile, investors digested mostly bullish quarterly results from corporates.

General Motors (NYSE:GM) rose 3% after reporting first-quarter earnings that topped consensus estimates.

Wendy’s (NASDAQ:WEN) rallied 6.6% after the declines in same-restaurant sales narrowed each week through April, while first-quarter results slowed from the Covid-19 pandemic.

Shopify (NYSE:SHOP) jumped 7.28% as revenue topped estimates amid a surge in demand for e-commerce as the pandemic has shuttered offline businesses.

Pinterest (NYSE:PINS) reported revenue that topped estimates, but the social media company warned on gross margins as advertising income slowed in the wake of the coronavirus crisis, sending its shares 15% lower.

Energy stocks were among the biggest decliners on the day, as oil prices fell amid ongoing concerns about a glut in supply, but a smaller-than-expected build in weekly U.S. crude inventories supported sentiment somewhat.

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