By Yasin Ebrahim
Investing.com – The Dow eased from record highs Wednesday, as technology cut some gains, while cyclicals continued to advance despite a surprise decline in US services activity and weaker labor market data.
The Dow Jones Industrial Average rose 0.29%, or 97 points, after hitting an intraday record of 34,257.75 the S&P 500 was up 0.05%, and the Nasdaq Composite slipped 0.38%.
Tech stocks struggled to hold onto their gains amid ongoing concerns about the impact of rising inflation and an eventual increase in rates.
Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL) traded in the green, while Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) were lower.
Facebook, meanwhile, was in the spotlight after its oversight board ruled in favor of the social media giant's decision to ban former President Donald Trump, but said the company must make a decision on whether to ban Trump permanently in the coming months.
Energy stocks were pushed higher even as oil prices gave up some gains despite data showing a larger-than-expected draw that strengthened investor expectations for a recovery in demand.
U.S. crude oil stocks slipped by 9 million barrels in the week ended April 30, a much larger decrease than the 2 million barrel drop expected.
Other cyclicals including materials and financials supported the broader market's move higher as optimism over the economy continued despite weaker labor market and services data.
ISM nonmanufacturing data for April fell a reading of 62.7, missing expectations of 64.3.
"The small decline in the headline is slightly surprising, given the surge in spending on services last month as the reopening continued and people spent part of the latest round of stimulus payments, but the level of the index is still the second-highest on record," Pantheon Macroeconomics said in a note.
On the labor market front, private payrolls grew by 742,000 for April, according to a report released Wednesday by ADP and Moody's (NYSE:MCO) Analytics. That missed economists' forecast of 800,000.
The labor market data comes just days ahead of the crucial nonfarm payrolls due Friday.
Corporate earnings also served up notable moves in the stocks.
Activision Blizzard (NASDAQ:ATVI) climbed more than 1% after reporting first-quarter adjusted EPS of $0.84, driven by net bookings growth that topped consensus estimates amid ongoing demand for its Call of Duty and World of Warcraft franchises. The company also raised its full-year guidance.
General Motors (NYSE:GM) reported first Q1 earnings of $2.25 per share, well above estimates of $1.04 a share, and said it was "highly confident" in its full-year 2021 guidance, sending its shares up more than 3%.
Lyft (NASDAQ:LYFT) reported better-than-expected Q1 results, but came under pressure after President Joe Biden blocked a Trump-era rule that would have made it easier to classify gig workers as contractors. Uber (NYSE:UBER), and Door Dash were also lower.
In other news, Peloton (NASDAQ:PTON) fell 14% as the exercise equipment company recalled its Tread+ and Tread treadmills due to a risk of injury. The recall comes after weeks of negotiations with the U.S. Consumer Product Safety Commission.