By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market ended Wednesday
with modest gains that sent the benchmark S&P 500 index to a
record level for the 16th time this year.
A mixed bag of economic reports sent shares lower in early
trade, but investors appeared to have shrugged them off by the
afternoon.
Private-sector hiring slowed in May, and April's outsize gains
were revised down. The trade deficit jumped in April to a two-year
high, above expectations, while productivity in the first quarter
declined sharply due to harsh winter.
The only encouraging report on Wednesday came from the Institute
for Supply Management, which reported that the service sector
activity heated up last month, with the closely watched index
jumping to the highest level in 9 months.
The S&P 500 (SPX) closed near session highs, up 3.62 points,
or 0.2%, at 1,927.86. The Dow Jones Industrial Average (DJI) rose
15.19 points, or 0.1%, to 16,737.53. The Nasdaq Composite (RIXF)
ended the day up 17.56 points, or 0.4%, at 4,251.64.
Read the recap of MarketWatch's live blog of today's
stock-market action.
"The outlook for the US economy continues to improve, as the
rebound in economic activity is showing up across the sectors,"
wrote Peter Cardillo, chief market economist at Rockwell Global
Capital.
"The setting of new records on a daily basis for the Dow and
S&P suggest a summer higher trading range is unfolding. On the
other hand, from a technical perspective, the market may be overly
complacent and small pullbacks should be expected as the bull trend
remains in place," Cardillo wrote.
Private-sector employers added 179,000 jobs in May, Automatic
Data Processing Inc. reported Wednesday. The number was below the
expected gain of 210,000.
The U.S. trade deficit surged in April to a two-year high, while
U.S. productivity in the first quarter declined at a sharp annual
rate -- the worst in six years, due to an unusually harsh
winter.
On the bright side, growth picked up last month for the U.S.
service sector and non-manufacturing companies, with the index
tracking the activity rising to the highest reading since
August.
Separately, the Federal reserve reported that most regions of
the U.S. are continuing to grow at a "modest" and "moderate" pace.
The so-called Beige Book found rising consumer spending, healthy
manufacturing, but a wobbling residential real estate sector.
Corporate news
Hovnanian Enterprises Inc. shares fell 2.2% Wednesday after
reporting second-quarter earnings that fell short of
expectations.
In deal news, Protective Life Corp. shares (PL) jumped 18% after
Japan's Dai-ichi Life Insurance Co. said it plans to buy the
U.S.-based life insurer for $5.7 billion.
First Solar Inc. (FSLR) is one of the biggest gainers today in
the S&P 500, rising 3.9%. SunPower Corp (SPWR) is up 7%. U.S.
solar companies likely are getting a lift from a U.S. government
move that could hurt their Chinese competitors.
A 1.1% rise in Apple Inc. (AAPL) shares helped Nasdaq Composite
higher.
In other markets, most Asian equities fell, taking their cue
from losses in U.S. stocks Tuesday. In Europe, the benchmark Stoxx
Europe 600 closed nearly flat.
Gold futures (GCQ4) and oil futures (CLN4) settled lower.
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