Stocks jumped higher out of the gate Wednesday thanks to the latest jobs data. By mid-afternoon, however, the main indexes had erased these earlier gains as oil prices crumbled.
Ahead of the open, ADP said the U.S. added 103,000 private payrolls in November, below economists' estimates for a gain of 128,000. The data also showed that annual wage growth slowed to its lowest level since 2021 for both job-stayers (+5.6%) and job-changers (+8.3%). The ADP jobs data is the latest sign that the hot labor market is starting to cool, and comes ahead of the Labor Department's monthly nonfarm payroll report, which will be released this Friday.
"The softer turn of recent labor market releases reduces the risk that inflation pressures revive due to wage-price issues, making it easier for the Fed to pivot to rate cuts in 2024," says Bill Adams, chief economist for Comerica Bank.
The data sent the three main indexes higher to start the day. At the close, however, the Nasdaq Composite (-0.6% at 14,146), the S&P 500 (-0.4% at 4,549) and the Dow Jones Industrial Average (-0.2% at 36,054) were all in negative territory as focus shifted to sinking oil prices.
Energy stocks fall alongside oil prices
Indeed, U.S. crude futures crumbled 4.1% to $69.38 per barrel after data from the Energy Information Administration (EIA) showed gasoline inventories rose by more than 5 million barrels last week. Oil prices have been sliding in recent months and are down about 25% from their September highs near the $94 per-barrel mark.
Not surprisingly, energy stocks suffered today, with Diamondback Energy (FANG, -2.4%), Marathon Oil (MRO, -3.5%) and SLB (SLB, -2.9%) among the biggest decliners.
Mastercard announces major dividend hike
Elsewhere, Mastercard (MA) gained 0.4% after the credit card giant said its board of directors approved a 16% dividend hike. The company also disclosed a new $11 billion stock buyback program.
Mastercard is a solid choice among dividend stocks, having consistently paid shareholders since it went public in 2006. This is nearly as long as MA has been a member of the Berkshire Hathaway equity portfolio, with Warren Buffett & Co. initiating a stake in Q1 2011. The 4 million MA shares currently owned by Berkshire account for a minuscule 0.5% of the portfolio.
Bitcoin keeps rising
Bitcoin was another notable gainer Wednesday, rising 0.4% to $43,868 (Bitcoin markets don't close; price taken at 4 pm Eastern). The cryptocurrency has surged roughly 50% since late October on hopes the first spot bitcoin ETF (exchange-traded fund) could soon be approved. Current Bitcoin ETFs are tied to futures prices, which are where the cryptocurrency is expected to be trading in the future.
"The rally has been quite extraordinary even by Bitcoin's standards and highlights how excited the community is by the prospect of an ETF approval," says Craig Erlam, senior market analyst at OANDA. "Lower interest-rate expectations have almost certainly helped, but I think the ETF is still probably the primary driver."
Today's upside came even as JPMorgan Chase (JPM, -1.1%) CEO Jamie Dimon said during congressional testimony that he is "deeply opposed" to crypto. "If I was the government, I'd close it down," he added while speaking in front of the Senate Banking Committee.
Looking ahead to Thursday, weekly jobless claims will be released. Additionally, Broadcom (AVGO, -1.0%) and Lululemon Athletica (LULU, +0.8%) make an appearance on the earnings calendar.
