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Dow dips ahead of Powell speech; Nasdaq kept afloat by growth stocks


Wall Street was mixed on Wednesday, with the Dow and S&P 500 down and heavyweight growth stocks boosting the Nasdaq as focus shifts to comments from Federal Reserve Chair Jerome Powell later in the day.

Powell’s speech will be closely watched for signs of a slowdown in the pace of interest rate hikes by the central bank, as well as to assess the general health of the U.S. economy.

“The market is expecting him (Powell) to say maybe we won’t do the 75 bps hike … when people listen to the Fed Chair speak, they’re waiting for that little hint,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

Hopes that the Fed will now hike rates in smaller increments and recent data pointing to a mild cooling in prices have positioned the benchmark S&P 500 index (.SPX) for its second straight month of gains.

The Dow Jones Industrial Average (.DJI) has gained 17.5% in the last two months, while the Nasdaq index (.IXIC) has added 4.2%.

“After the gains that we’ve seen, you’ve got some investors that are taking a little bit of money off the table here today,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “Again, nothing dramatic.”

Traders expect the Fed to increase rates by 50 basis points in December, with the rates peaking in June 2023. FEDWATCH

Heavyweight growth firms, Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O), rose between 0.1% and 1.0%.

Tesla Inc’s (TSLA.O) shares rose 0.3%, after China Merchants Bank International said Tesla’s sales in China in November were boosted by price cuts and incentives offered on its Model 3 and Model Y.

Data on the day was mixed as the ADP National Employment report showed private employment increased by 127,000 in November, below expectations of 200,000 jobs, suggesting demand for labor was cooling amid high interest rates.

The Labor Department’s closely watched nonfarm payrolls data is due on Friday. A report showed U.S. job openings falling to 10.334 million in October, against 10.687 million in the prior month.

Another reading showed the U.S. economy rebounded more strongly than initially thought in the third quarter.

“A mixed bag this morning. So I don’t really make much out of that, I’d like to see what Powell has to say,” Saluzzi added.

At 12:07 p.m. ET the Dow was down 157.90 points, or 0.47%, at 33,694.63, the S&P 500 was down 5.02 points, or 0.13%, at 3,952.61, and the Nasdaq was up 29.04 points, or 0.26%, at 11,012.81.

3M Co (MMM.N) fell 3.1% amid weakness in its consumer-facing businesses.

Biogen Inc (BIIB.O) jumped 4.2% after its experimental Alzheimer’s drug slowed cognitive decline in a closely watched trial.

Declining issues outnumbered advancers for a 1.15-to-1 ratio on the NYSE and a 1.09-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and one new low, while the Nasdaq recorded 51 new highs and 120 new lows.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 22, 2022. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 29, 2022. REUTERS/Brendan McDermid