At closing bell, the Dow Jones Industrial Average index advanced 454.84 points, or 1.59%, to 29,100.50. The S&P 500 index added 54.19 points, or 1.54%, to 3,580.84. The tech-heavy Nasdaq Composite Index grew 116.77 points, or 0.98%, to 12,056.44.
ECONOMIC NEWS: US ADP Private Sector Job Growth Climbs In August- US private sector employment increased by 428,000 jobs in August after rising by an upwardly revised 212,000 jobs in July, US payroll processor ADP reported on Wednesday. The report said employment in the service-providing sector climbed by 389,000 jobs in August, reflecting notable job growth in the leisure and hospitality and healthcare and social assistance industries. Employment in the goods-producing sector edged up by 40,000 jobs, as the construction industry added 28,000 jobs and manufacturing employment inched up by 9,000 jobs. ADP also said employment at large businesses jumped by 298,000 jobs, while employment at mid-sized and small businesses rose by 79,000 jobs and 52,000 jobs, respectively.
US Factory Orders Soars 6.4% In July- US factory orders soared by 6.4 percent in July, according to a report released by the Commerce Department on Wednesday. Factory orders continued to spike as orders for durable goods skyrocketed by 11.4 percent in July after soaring by 7.7 percent in June. Orders for transportation equipment led the way higher. The Commerce Department said orders for non-durable goods also increased by 1.8 percent in July after jumping by 5.3 percent in June.
Overall Outlook Modestly Optimistic, Indicates Beige Book- US economic activity has increased over the past several weeks, according to the Federal Reserve's Beige Book, although the gains were described as generally modest. The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, also noted economic activity remains well below levels prior to the COVID-19 pandemic.
The Fed said manufacturing rose in most districts amid increased activity at ports and among transportation and distribution firms. Consumer spending also continued to pick up, the report said, with the increase reflecting strong vehicle sales and some improvements in tourism and retail sectors. However, the Fed noted many districts reported a slowing pace of growth in these areas, and total spending was still far below pre-pandemic levels.
The Beige Book also said commercial construction decreased and commercial real estate remained in contraction, while residential construction was described a bright spot, showing growth and resilience in many districts. The report said employment increased overall, with gains in manufacturing cited most often, but some districts reported slowing job growth and increased hiring volatility. On the inflation front, the Fed said price pressures increased since the last Beige Book in July but remained modest.
Fed Chair Jerome Powell recently announced a shift with regard to the price-stability side of the central bank's dual mandate and the adoption of a "flexible form of average inflation targeting." Powell's comments last Thursday were seen as an indication the Fed will leave interest rates at near-zero levels for the foreseeable future even if there is an acceleration in the pace of inflation. Looking ahead, the Beige Book said the overall outlook among contacts was modestly optimistic, but a few districts noted some pessimism.
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