By Geoffrey Smith
Investing.com -- U.S. stock markets opened at fresh all-time highs on Wednesday, extending a rally built on hopes for more monetary stimulus from the Federal Reserve, and shrugging off disappointing labor market numbers.
Stocks continued their ascent at midday. By 12:25 PM ET (1645 GMT), the Dow Jones Industrial Average was up 240 points, or 0.8%. The S&P 500 was also up 0.8%, and the Nasdaq Composite was up 0.1%. The latter two had both closed at record highs on Tuesday.
Earlier, payrolls processor ADP had reported that private-sector employment only rose by 428,000 in the month to mid-August, well below expectations for a number anywhere between 950,000 and 1.2 million. The numbers are the latest sign that the recovery is flattening out after an initial sharp rebound from the lows of the second quarter.
However, the market was in "good news is good news and bad news is good news" mode again, as the data reinforced expectations of more stimulus from the Federal Reserve. Governor Lael Brainard had said late on Tuesday that the central bank will have to do more in order to meet its - now revised - target for inflation.
Traders even managed to put a positive spin on the continued deadlock over the next round of fiscal support measures, as Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi renewed contact after a two-week break for party conventions. Mnuchin rejected a trimmed-down $2.2 trillion proposal from Pelosi, while the Speaker said there were still "serious differences" between the two sides, which seem content to carry on trying to blame each other for the lack of breakthrough.
Both Apple (NASDAQ:AAPL) stock and Tesla (NASDAQ:TSLA) stock were down, taking a breather from the indiscriminate buying that followed their stock splits at the end of last week. Tesla was down 7%, while Apple was down 2.5%. Also hit by profit-taking was Zoom Video Communications (NASDAQ:ZM) stock, which fell 7% after rising over 25% in response to an exceptionally strong quarterly report on Monday evening.
Standout gainers included DraftKings (NASDAQ:DKNG) stock, which rose 8% before giving back some of the gain, after the sports betting company said basketball legend Michael Jordan had taken an equity stake in the company and would join its board as an advisor.
Likewise AMC Entertainment (NYSE:AMC)t stock rose 10% after the movie theater operator said it will reopen 140 cinemas this week.
Stocks had gained sharply last week as the dollar weakened in response to the Fed news, but showed little sign of reversing as the US Dollar Index Futures corrected sharply upward in early trade in New York. Other assets kept more to their usual relationship with the dollar, as both Crude Oil WTI Futures and Bitcoin fell sharply