KEY POINTS

  • Federal Reserve said it expects to maintain current loose monetary policy until economy returns to normal.
  • The ISM said its manufacturing index rose to 52.6% in June from 43.1% in May
  • U.S. construction spending fell 2.1% in May, following a 3.5% decline in April.

U.S. stocks finished mixed on Wednesday in choppy trading despite a promising new vaccine for covid-19 and relatively strong private payroll data.

The Dow Jones Industrial Average dropped 77.91 points to 25,734.97, while the S&P 500 rose 15.57 points to 3,115.86 and the Nasdaq Composite Index climbed 95.86 points to 10,154.63.

Wednesday’s volume on the New York Stock Exchange totaled 3.77 billion shares with 1,554 issues advancing, 49 setting new highs, and 1,433 declining, with two stocks setting new lows .

Active movers were led by Workhorse Group Inc. (WKHS), American Airlines (AAL) and General Electric Co. (GE).

An analysis of a coronavirus vaccine candidate being developed by Pfizer (PFE) and Germany’s BioNTech (BNTX) showed some positive results.

“We are encouraged by the clinical data of BNT162b1, one of four [messenger ribonucleic acid] constructs we are evaluating clinically, and for which we have positive, preliminary, topline findings,” said Kathrin U. Jansen, head of vaccine research and development at Pfizer.

Pfizer also noted that if the vaccine receives regulatory approval, it expects to manufacture up to 100 million doses by year-end and possibly more than 1.2 billion by the end of 2021.

Pfizer shares jumped more than 3%.

In minutes from its early June meeting, the Federal Reserve said it expects to maintain easy monetary policy until the economy returns to normal.

“Most participants commented that the Committee should communicate a more explicit form of forward guidance for the path of the federal funds rate and provide more clarity regarding purchases of Treasury securities and agency [mortgage-backed securities] as more information about the trajectory of the economy becomes available,” the Fed said.

The Institute for Supply Management said its manufacturing index rose to 52.6% in June from 43.1% in May.

The Commerce Department said U.S. construction spending fell 2.1% in May, following a 3.5% decline in April.

Private payrolls jumped by 2.369 million in June, said ADP and Moody’s Analytics. Payroll data for May was dramatically revised upward to 3.065 million.

“Small business hiring picked up in the month of June,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “As the economy slowly continues to recover, we are seeing a significant rebound in industries that once experienced the greatest job losses.”

Worries persist over the ongoing covid-19 pandemic. At least 12 states have postponed or scaled back their planned reopenings due to rising infections.

“We just see this ongoing push-and-pull between reopening [the economy] and the virus,” said Tom Hainlin, global investment strategist at Ascent Private Capital Management. “We got some positive early stage vaccine data from Pfizer, but you’ve got… companies, saying they’re going to slow down our process of getting people back to the office because of this resurgence.”

“We continue to expect [the recovery] to be an uneven process, albeit with a positive trajectory,” said Keith Lerner, chief market strategist at SunTrust Advisory Services. “The good news is through this digestion period, markets are working off some of the excesses that had built up, and elevated expectations are being reset.”

Katerina Simonetti, senior portfolio manager at UBS Private Wealth Management in Philadelphia, said: “Although we expect some level of recovery in 2021, we don’t think corporate profits will recover to levels reached in 2019 until 2022. In our base case we expect S&P 500 to be trading around 3,300 by December 2020.”

Overnight in Asia markets finished mixed, as China’s Shanghai Composite index climbed 1.38% and Japan’s Nikkei-225 slipped 0.75%. Hong Kong’s Hang Seng exchange was closed for a holiday.

In Europe markets traded lower, as Britain’s FTSE-100 edged down 0.19%, while France’s CAC-40 slipped 0.18% and Germany’s DAX fell 0.41%.

Crude oil futures gained 1.07% at $39.69 per barrel, Brent crude slipped 0.29% at $41.91. Gold futures fell 1.09%.

The euro rose 0.16% at $1.1254 while the pound sterling gained 0.6% at $1.2477.

The yield on the 10-year Treasury rose 4.44% to 0.682% while yield on the 30-year Treasury gained 1.7% to 1.433%.