Investing.com – Wall Street traded mixed on Wednesday after a strong report on the U.S. labor market sparked increased optimism over the economy but was also coupled with speculation about its impact on monetary policy.
At 11:43AM ET (16:43GMT), the Dow Jones fell 19 points, or 0.09%, the S&P 500 inched up 1 point, or 0.02%, while the Nasdaq Composite rose 13 points, or 0.23%.
ADP reported that the U.S. economy created 298,000 private non-farm payrolls in February, smashing through estimates for just 190,000 at its highest level since March 2016.
While the report set the stage for a positive read from the upcoming government jobs report on Friday, it also suggested that the Federal Reserve (Fed) would have no impediment to tightening policy at its meeting next week.
Odds on future rate hikes have undergone volatility in the lead up to the March meeting, though they have moved beyond 80% this week from around 20% before a string of recent hawkish comments from Fed policy makers convinced markets that the central bank would make a move in their March 15 announcement.
The probability reached nearly 91% after the ADP report.
Other data out Wednesday showed that fourth quarter productivity went unrevised at a sluggish 1.3%, while unit labor costs, the price of labor per single unit of output, also remained at a 1.7% increase.
Additionally, wholesale inventories showed a modest pullback of 0.2% in January, more than the 0.1% decline forecast.
In company headlines, Caterpillar (NYSE:CAT) led the decliners on the Dow with losses of more than 1% after The New York Times said a government report accused the heavy equipment maker of fraud by using improper accounting techniques.
In earnings news, H&R Block (NYSE:HRB) saw shares soar 15%, leading the S&P 500 higher as the tax preparation firm reported a lower-than-expected quarterly loss and gained market share in the first half of the tax season.
On the downside, Urban Outfitters (NASDAQ:URBN) led the decliners on the global benchmark for equities with losses of 5% after the retail chain missed on earnings and reported flat same-store sales, while recognizing the challenging environment with the switch to e-commerce.
Eyes also remained on Snap Inc (NYSE:SNAP) after its debut last Thursday. Shares were up more than 2% on Wednesday as billionaire investor and head of Appaloosa Management David Tepper admitted he had bought into the IPO.
Meanwhile, oil prices sank on Wednesday as a larger-than-expected build in U.S. crude inventories appeared to outweigh bigger-than-forecast draws on gas and distillate stockpiles.
Though black gold initially pared losses in an immediate reaction to the data, the selloff mounted in midday trade.
U.S. crude futures slumped 1.90% to $52.13 by 11:44AM ET (16:44GMT), while Brent oil traded down 1.68% to $54.98.