US close: Street finishes higher amid high hopes for China talks
Wall Street finished in the green on Wednesday, after a session in which sentiment was underpinned by solid Chinese services data and optimism ahead of the resumption of Sino-US trade talks.
The Dow Jones Industrial Average ended the day up 0.15% at 26,218.13, the S&P 500 added 0.21% to 2,873.40, and the Nasdaq 100 was ahead 0.6% at 7,544.97.
At the open, the Dow had lost 18 points following a report suggesting that a trade agreement between the US and China was 90% done, as talks between the two were set to resume in Washington later in the day.
The Financial Times cited Myron Brilliant, executive vice president for international affairs at the US Chamber of Commerce as saying: "90% of the deal is done, but the last 10% is the hardest part, it's the trickiest part and it will require trade-offs on both sides."
According to the report, China still wanted to remove existing tariffs on Chinese goods while the US wants China to agree on a mechanism to ensure the enforcement of any deal.
“Obviously the last 10% was always likely to be the most challenging but we’re hearing nothing at the moment that suggests a deal is at risk, rather there’s a lot of optimism that it will get done. We’re just going to have to be a little patient,” said Oanda analyst Craig Erlam.
Also boosting the mood was China's Caixin services purchasing managers' index, which rose to a 14-month high of 54.4 last month from 51.1 in February, beating expectations for a reading of 52.3.
“We've spent so long fretting about a Chinese slowdown and the impact that a prolonged trade war could have that this week's data releases have come as something of a surprise,” Erlam added.
“The services PMI capping things off, coming in well above expectations at 54.4 - the highest since January 2018 - is more than welcome.”
On the data front, all eyes were on the ADP employment report ahead of Friday's non-farm payrolls report.
Private sector employment in the US grew less than expected in March amid trade uncertainty and fading fiscal stimulus, according to data released by the ADP on Wednesday.
Employers added 129,000 jobs last month, missing expectations for a 170,000 rise and marking the slowest employment increase in 18 months.
Meanwhile, February's figure was revised up to 197,000 from 183,000.
Small businesses with fewer than 50 employees added 6,000 jobs, while medium-sized businesses with between 50 and 499 employees created an extra 63,000 jobs.
Large businesses with 500 or more employees recruited an additional 60,000 people.
The goods-producing sector lost 6,000 jobs, while the services sector recruited 135,000 people, with education and health services making the biggest contribution, at 56,000.
“The job market is weakening, with employment gains slowing significantly across most industries and company sizes. Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening,” said Mark Zandi, chief economist at Moody’s Analytics.
“If employment growth weakens much further, unemployment will begin to rise.”
The Institute for Supply Management's non-manufacturing Purchasing Managers' Index - the bulk of which is accounted for by services - also weakened more than expected, falling from February's level of 59.7 to 56.1 in March, against consensus expectations for a reading of 58.0.
In corporate news, Signet Jewelers was up 0.54% as its quarterly earnings beat expectations and sales fell less than forecast.
Boeing shares descended 1.47% after a report revealed that pilots of that 737 MAX that crashed in Ethiopia followed emergency protocols but were still unable to regain control,
GameStop stock was down 4.7% after issuing lower than expected guidance on Tuesday evening.
Shares in Blue Apron pared some earlier gains, but still finished 7.36% higher, after the meal kit delivery outfit revealed that chief executive Bradley Dickerson had resigned late on Tuesday.