By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fluctuated on Wednesday as
investors pondered the implications of an upbeat private-sector
jobs report and awaited minutes from the last Federal Open Market
Committee meeting for more insight into the central bank's tapering
plans.
The S&P 500 (SPX) recovered opening losses and inched up 1
point to 1,838.81. On Tuesday, the benchmark index recorded its
first gain this year, snapping a three-day skid.
The Dow Jones Industrial Average (DJI) fell 58 points, or 0.4%,
on Wednesday to 16,472.43, while the Nasdaq Composite (RIXF) rose
17.55 points, or 0.4%, to 4,170.80.
Automatic Data Processing said on Wednesday that private
employers created 238,000 jobs in December, exceeding estimates.
Economists polled by MarketWatch expected a gain of 215,000 jobs.
Economists use ADP's data to get a sense of the U.S. Labor
Department's employment report, which will be released Friday and
covers government jobs in addition to the private sector.
Ian Shepherdson, chief economist at Pantheon Macroeconomics
wrote that while "it is not a guarantee, the odds now favor a
consensus-beating report on Friday."
Better-than-expected jobs numbers strengthened the case for
further tapering of the Federal Reserve's bond-buying program,
which has boosted equities. Phil Orlando, chief equity strategist
at Federated Investors, said markets were wrong to sell off on good
news and will eventually correct themselves.
"The ADP numbers were excellent today, not only did they beat
consensus estimates by a wide margin, the November numbers were
also revised upwards," Orlando said.
"These numbers, as well as phenomenal numbers from the trade
deficit data, have prompted many analysts to upgrade their
estimates for the GDP," he added.
"Markets are coming to the realization that the reason behind
the Fed's decision to start tapering in January is because it
genuinely believes that the economy can continue to grow on its own
from here on and that the tapering will finish by the end of the
year," Orlando said.
Investors are awaiting the release of FOMC minutes at 2 p.m.
Eastern. At the Dec. 18 meeting, Federal Reserve Chairman Ben
Bernanke and his colleagues announced a $10 billion reduction in
the central bank's bond-buying program, pulling it back to $75
billion a month, starting in January. The Fed also firmed up its
forward guidance, saying short-term interest rates would not rise
until "well past the time" the jobless rate drops below its 6.5%
threshold.
Shares of Micron Technology Inc. (MU) surged 9.9% after the chip
maker reported results late Tuesday that beat Wall Street
expectations.
Forest Laboratories Inc. (FRX) rallied 16.6% after announcing
that it would acquire Aptalis, a specialty pharmaceutical company,
for $2.9 billion in cash.
Constellation Brands Inc. (STZ) shares climbed 8.3% after the
beverage company beat its third-quarter earnings target and raised
its full-year profit outlook.
Apollo Education Group Inc. (APOL) shot up 14% after the
for-profit education company's quarterly earnings beat analyst
estimates.
Shares of Container Store Group Inc. (TCS) dropped 14% after the
retailer said late Tuesday that it had swung to a third-quarter
loss. The firm went public in early November.
Twitter Inc. (TWTR) shares fell 1.8% after analysts at Cantor
Fitzgerald downgraded the social media company to sell from
hold.
J.C. Penney Co. (JCP) commented on its holiday sales Wednesday,
saying it is "pleased with its performance," but provided no
details in the report. Shares of the struggling retailer dropped
8%.
In other markets, European stocks pulled back from moderate
gains after data showed retail sales in the euro zone rising at the
fastest rate in 12 years during November, lifting hopes for a
revival in domestic demand. The monetary policy committees of the
European Central Bank and the Bank of England will release
decisions on interest rates on Thursday.
Asian stocks traded mixed, with the Nikkei 225 index firming up
on a weaker yen.
The dollar rose, while gold (GCH4) and oil prices (CLG4)
declined.
More from MarketWatch:
Follow the stock market live blog
Private-sector hiring is strongest in 13 months
What to look for in the Fed minutes.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires