By Yasin Ebrahim
Investing.com -- The Dow closed higher Wednesday, led by healthcare stocks, though the ongoing wreck in tech stifled gains after data pointing to underlying economic weakness stoked concerns about the economy just as Federal Reserve officials talk up the prospect of further rate hikes.
The Dow Jones Industrial Average gained 0.2%, or 80 points, the S&P 500 fell 0.3%, and the Nasdaq fell 1.2%.
A stumble in Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), and Meta Platforms Inc (NASDAQ:META) led the broader market lower as risk sentiment was soured by monthly private payrolls in March and U.S. services data fell short of estimates, triggering fresh recession fears.
Private payrolls grew by 145,000 in March, a sharp decline from the 261,000 in February, according to a report released Wednesday by ADP (NASDAQ:ADP) and Moody's Analytics. That was well short of economists’ forecast of 200,000.
The services ISM fell to a reading of 52.6 in March from 50.6 in February, missing the consensus of 53.8.
“Much of the pressure that fuels inflation is rooted in sticky-high unit labor costs in the service sector,” Jefferies said. But the prices paid index suggests that “this pressure remains very firm, and will keep the Fed on track for another rate hike in May,” it added.
Cleveland Fed President Loretta Mester on Wednesday backed a higher for longer rate regime, saying that interest rates will likely increase.
A stumble in the chip sector also weighed on the broader sector as NVIDIA Corporation (NASDAQ:NVDA) fell more than 2% on worries about increased competition after Alphabet's (NASDAQ:GOOGL) Google revealed details about its artificial intelligence chips, claiming they were faster and less power hungry than that of rivals.
Palantir Technologies (NYSE:PLTR), meanwhile, came under pressure after announcing that it had expanded its cloud computing pact with Microsoft (NASDAQ:MSFT) to the public sector from the private sector.
Johnson & Johnson (NYSE:JNJ), a major Dow component, ended up 4.5% and lifted healthcare stocks after announcing that its subsidiary LTL Management has re-filed for Chapter 11 bankruptcy protection just months after an appeals court rejected its "Texas two-step" process to settle lawsuits that allege its talc products caused cancer.
Energy stocks recovered ground from a slump a day earlier as oil prices struggled for direction following data showing U.S. weekly crude inventories fell more than expected last week, adding to worries about a demand and supply delay following the unexpected OPEC+ production cut earlier this week.
In a sign of investor jitters, defensive corners of the market including utilities and consumer staples were in the ascendency, with the latter boosted by a rise in Conagra Brands.
ConAgra Foods (NYSE:CAG) rose about 2% after reporting quarterly results that beat Wall Street estimates on both top and bottom lines as the frozen-food maker’s price hikes helped offset weaker demand.
In other news, FedEx Corporation (NYSE:FDX) detailed plans to combine its ground, air and other delivery networks into a single business by June 2024 to accelerate cost-cutting efforts.