Stocks straddled the flatline in late-afternoon trading Wednesday after the Federal Reserve struck a more downbeat tone on the U.S. economy.
The S&P 500 was up 0.05%, the Dow Jones Industrial Average slid 0.08%, and the Nasdaq fell 0.15%.
The Fed's "Beige Book" said that economic activity continued to expand in most of the central bank's 12 districts from early January to late February, though not as solidly as in previous months. Manufacturing activity was weaker as a stronger U.S. dollar and weaker global economy deterred demand.
Crude oil trading stabilized by mid-afternoon as investors weighed hopes for a supply cut from Saudi Arabia against a larger-than-expected increase in U.S. inventories. The Saudi Arabian government is reportedly seeking an international loan of up to $10 billion as it struggles with lower oil prices. The reports sparked hopes Saudi's lack of funds could prompt a supply cut.
Oil was sharply lower earlier in the morning after an official read on crude inventories climbed. Crude inventories rose by 10.4 million barrels last week, according to the Energy Information Administration, nearly three times what analysts had expected. West Texas Intermediate crude was up 0.9% to $34.71 a barrel.
Far more jobs were added to private payrolls in February than analysts had expected. The ADP employment report showed that 214,000 jobs were added to private payrolls last month compared to an expected increase of 190,000.
The U.S. jobs report for February, due Friday, is the key release of the week and the most important piece of data between now and when the Federal Reserve meets on March 15. Economists expect 215,000 jobs to have been added to U.S. nonfarm payrolls over the past month.
A stronger number could increase expectations for a rate hike this month from the Fed, which boosted interest rates in December for the first time since cutting them to nearly zero during the financial crisis. The majority of analysts predict the Fed will leave them unchanged.
The S&P 500 surged 2.4% on Tuesday, its best-ever start to March, while the Dow rocketed 2.1% higher, its best since 2002. Traders had their pick of good news to fuel positive vibes throughout the day: The U.S. manufacturing sector showed signs of improvement, strength in car sales continued through February, and crude oil closed above $34 a barrel.
China's stock market continued to bound higher even as Moody's Investor Service cut its outlook on the country's credit rating to negative from stable. The ratings agency said that growth in the world's second-largest economy would "slow more markedly as a high-debt burden dampens business investment." The country's rating is still seven levels above junk status. China's Shanghai Composite surged 4.3% on Wednesday.
Abercrombie & Fitch (ANF - Get Report) jumped 2% after surpassing analysts' estimates in its recent quarter. The apparel retailer earned an adjusted $1.08 a share, 9 cents more than expected. The company also reported same-store sales growth for the first time in more than three years.
Exxon Mobil (XOM - Get Report) shares fell slightly after the oil company announced it expects to reduce 2016 capital spending by 25% to $23 billion. The industry giant said it plans to weather the current commodities climate by focusing on its fundamentals and rewarding investors with dividends.
Monsanto (MON) fell after cutting its profit outlook. The chemicals company expects adjusted full-year profit between $4.40 and $5.10 a share, down from a previous range of $5.10 to $5.60 a share. The company expects full-year free cash flow no higher than $1.6 billion, down from previous guidance of $1.6 billion to $1.8 billion.
Chesapeake Energy (CHK - Get Report) tumbled after former CEO Aubrey McClendon was indicted on a charge of conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma between 2007 and 2012. The Department of Justice said in a statement that McClendon is suspected of orchestrating a scheme between two large energy companies, which are not named in the indictment.
Starbucks (SBUX - Get Report) shares were slightly lower after former Chief Operating Officer Troy Alstead decided to leave the company on a permanent basis after an extend unpaid leave. Director Kevin Johnson will take up the position. Alstead had been with the company for more than two decades and was instrumental in massive restructuring efforts a few years ago.
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Zynga (ZNGA - Get Report) jumped on news founding CEO Mark Pincus will step down from the position, though remain as executive chairman to the board. Board member Frank Gibeau will assume the position of CEO. Gibeau joined the board in August 2015.
Viacom (VIA.B) shares were on watch after a late-day surge on Tuesday following comments from DreamWorks (DWA) CEO Jeffrey Katzenberg expressing interest in a potential merger with its film studio Paramount Pictures. Viacom is currently considering selling minority stakes in Paramount.