WASHINGTON (dpa-AFX) - With traders reacting to a slew of U.S. economic data
ahead of an early close on Wall Street, stocks have moved mostly higher during
trading on Wednesday. The Nasdaq and the S&P 500 are adding to the gains posted
in the two previous sessions, reaching new record intraday highs.

Currently, the Nasdaq is up 90.34 points or 0.5 percent at 18,119.11 and the S&P
500 is up 13.90 points or 0.3 percent at 5,522.91. The narrower Dow, on the
other hand, has bucked the uptrend and dipped by 61.56 points or 0.2 percent at
39,270.29.

The strength on Wall Street may partly reflect optimism about the outlook for
interest rates following the release of some weaker than expected economic data.

A report released by the Institute for Supply Management showed an unexpected
contraction by U.S. service sector activity in the month of June.

The ISM said its services PMI slid to 48.8 in June from 53.8 in May, with a
reading below 50 indicating contraction. Economists had expected the index to
edge down to 52.5.

On the inflation front, the prices index dipped to 56.3 in June from 58.1 in
June, indicating a modest slowdown in the pace of price growth.

'The Fed will be glad to see that the ISM Services PMI reported cooler
inflation, and a little concerned that the economy seems to be losing momentum,'
said Bill Adams, Chief Economist for Comerica Bank. 'But controlling inflation
is still the Fed's number one priority.'

'They are unlikely to feel comfortable enough with progress on that front to cut
rates at the July decision,' he added. 'Even so, odds of a rate cut at the
following decision in September are higher in light of June's weak ISM PMIs and
rising jobless claims.'

The Labor Department released a separate report showing a modest increase by
first-time claims for U.S. unemployment benefits in the week ended June 29th.

The report said initial jobless claims rose to 238,000, an increase of 4,000
from the previous week's revised level of 234,000.

Economists had expected jobless claims to inch up to 235,000 from the 233,000
originally reported for the previous week.

Payroll processor ADP also released a report showing private sector employment
in the U.S. increased by slightly less than expected in the month of June.

ADP said private sector employment climbed by 150,000 jobs in June after rising
by an upwardly revised 157,000 jobs in May.

Economists had expected private sector employment to increase by 160,000 jobs
compared to the addition of 152,000 jobs originally reported for the previous
month.

However, overall trading activity remains somewhat subdued, as the markets are
set to close earlier than usual today and remain closed for the Independence Day
holiday on Thursday.

Sector News

Gold stocks have shown a substantial move to the upside on the day, resulting in
a 4.1 percent spike by the NYSE Arca Gold Bugs Index.

The rally by gold stocks comes amid a sharp increase by the price of the
precious metal, with gold for August delivery surging $38.90 to $2,371.80 an
ounce.

Considerable strength is also visible among steel stocks, as reflected by the
1.7 percent gain being posted by the NYSE Arca Steel Index.

Semiconductor and airline stocks are also seeing notable strength, while
pharmaceutical stocks have moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly
higher during trading on Wednesday. Japan's Nikkei 225 Index surged by 1.3
percent, while Hong Kong's Hang Seng Index jumped by 1.2 percent.

The major European markets have also moved to the upside on the day. While the
French CAC 40 Index is up by 1.2 percent, the German DAX Index is up by 1.1
percent and the U.K.'s FTSE 100 Index is up by 0.6 percent.

In the bond market, treasuries have shown a notable rebound after moving sharply
lower over the two previous sessions. Subsequently, the yield on the benchmark
ten-year note, which moves opposite of its price, is down by 9.1 basis points at
4.344 percent.



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