Stocks Finish Flat After Tepid Economic Results
NEW YORK (TheStreet) -- U.S. markets closed flat Wednesday as investors digested disappointing U.S. services sector and private-payrolls reports. Investors have been willing to attribute poor economic readings to an unusually harsh winter.
Earlier in the afternoon, the Federal Reserve's Beige Book report from data compiled before Feb. 24 indicated that the economy generally grew despite a slowdown in hiring due to the severe weather that swept across much of the country. Eight of 12 districts reported seeing improvements in the economy with manufacturing expanding modestly in most districts.
- The S&P 500 settled down 0.01% at 1,873.81 while the Dow Jones Industrial Average was off 0.22% to 16,360.18. The Nasdaq was up 0.14% to 4,357.97.
- The ISM Non-Manufacturing Index came in at 51.6 for February, 2.4 percentage points lower than January's reading of 54, and missing the consensus target of 53.5.
- U.S. private sector employment rose by 139,000 jobs from January to February, according to the ADP National Employment Reports. Economists were expecting an additional 150,000 to 160,000 jobs.
- In a sign Ukraine may be drawn further under the influence of Western Europe, European Commission President Jose Manuel Barroso said Wednesday that the EU had offered Ukraine an aid package of at least 11 billion euros over the next few years. He said the EU was ready to sign a trade deal with the region.
- U.S. Secretary of State John Kerry met with Russian diplomats on Wednesday, while Russia held talks with NATO over developments in Ukraine.
- Key European stocks were lower after strong rallies on Tuesday as the Ukraine-Russian stand-off calmed. The FTSE in London fell 0.71% while Germany's DAX shed 0.49%. In Asia, the Hang Seng closed down 0.34% while Japan's Nikkei was up 1.20%. Chinese authorities kept the growth target for the nation unchanged at 7.5%, despite signs of concerns around reaching it.
- The losses in key European markets came despite a raft of positive economic data. The UK's Markit/CIPS services purchasing managers index for February exceeded expectations at 58.2 despite falling from 58.3 in January. Across the European Union, January retail sales rose a better-than-expected 1.6%. And a second estimate on GDP growth showed the euro economy grew by 0.3% in the fourth quarter.
- Eli Lilly (LLY) was off 0.72% after the U.S. Food and Drug Administration rejected its experimental diabetes drug Empagliflozin.
- Chipotle Mexican Grill (CMG) was down 0.9% after website ThinkProgress noticed that the company mentioned in its last annual report that if global climate changes result in steep cost increases for certain raw ingredients, the restaurant chain may suspend popular menu items such as guacamole and salsas rather than pay the higher costs.
- Facebook (FB) was popping nearly 4% after Stifel Nicolaus hiked the price target for Facebook to $82 from $72 and reaffirmed its "buy" view on the stock.
-- Written by Andrea Tse and Jane Searle in New York
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