S&P 500, Nasdaq post record closing highs as data stokes hope for rate cut
Jobs data points to easing labor market
ISM services PMI weaker than expected
Paramount jumps on report of Skydance Media deal
First Foundation slumps after capital raise
Indexes: Dow -0.06%, S&P 0.5%, Nasdaq 0.88%
Adds prices, advancers and decliners
By Ankika Biswas, Lisa Pauline Mattackal and Saeed Azhar
July 3 (Reuters) - The S&P 500 index and technology-laden Nasdaq rose on Wednesday to post record high closes, as data pointing to a softening economy raised hopes the Federal Reserve could cut interest rates in September.
The Dow Jones Industrial Average closed slightly lower, pressured by selling in healthcare and consumer stocks during a shortened trading session ahead of the Fourth of July. The market will stay closedon Thursday forU.S. Independence Day, keeping trading volumes thin throughout the week.
Both theADP Employment report and weeklyjobless claims data pointed to easing labor market conditions ahead of Friday's closely watched non-farm payrolls report. Markets hope signs of weakness in the labor market will encourage the Fed to cut interest rates.
"It's quite a strong unemployment claims number, and it's fitting in with an overall trend that's probably an indication of loosening up in the jobs market. It must be quite welcoming for the Fed," said David Morrison, Trade Nation senior market analyst.
Also, PMI data from the Institute for Supply Management was weaker than expected, and factory orders unexpectedly slumped. Investors boosted bets of a September rate cut to over 70%,as per LSEG's FedWatch.<FEDWATCH>
The Fed'sJune meeting minutes are due after the market closes.
Tesla TSLA.O jumped 6.5%, trading near asix-month high after risingmore than 10% on Tuesday following a smaller-than-expected drop in second-quarter vehicle deliveries.
The Philadelphia SE Semiconductor Index .SOX rose 1.92%, helped by gains in the U.S. listing of Taiwan SemiconductorManufacturing TSM.N and Broadcom AVGO.O.
NvidiaNVDA.O closed 4.6% higher, after slipping on Tuesday, while some other mega-stocks were weaker such as Amazon AMZN.O, closing 1.2% lower.
"The tendency at the moment is towards rotation ... we have quite a few days where we see the Russell down, and tech up and vice versa," Morrison said, though noting that the market's optimism around megacap tech stocks was still strong.
The S&P 500 has jumped over 15% in the first half of 2024, largely supported by top-tier high momentum technology-related stocks. The benchmark index's equal-weighted counterpart .SPXEW only rose 5% and small and mid-cap stocks have significantly lagged.
The Dow Jones Industrial Average .DJI fell 23.85 points, or 0.06%, to close at 39,308.00, the S&P 500 .SPX gained 28.01 points, or 0.51%, to 5,537.02 and the Nasdaq Composite .IXIC gained 159.54 points, or 0.88%, to 18,188.30.
Paramount Global PARA.O rose almost 7% after Shari Redstone's National Amusements reached a preliminary deal to sell its controlling interest in the media giant to David Ellison's Skydance Media.
First Foundation FFWM.N slumped nearly 24% afterthe lender, which holds a huge portfolio of multifamily real estate loans,disclosed a $228 million unexpected capital raise.
Advancing issues outnumbered decliners by a 2.65-to-1 ratio on the NYSE. There were 287 new highs and 50 new lows on the NYSE.
The S&P 500 posted 20 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 51 new highs and 114 new lows.
Volume for the abbreviated session on U.S. exchanges was 7.11 billion shares, compared with the 11.64 billion average for the full session over the last 20 trading days.
Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by Maju Samuel and David Gregorio
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