US stocks end with moderate gains ahead of long weekend

Tech and consumer discretionary stocks perform the best

U.S. stocks closed higher on Wednesday, 03 July 2013 in advance of the Independence Day holiday, as positive jobs data countered international concerns in the abbreviated trading session. Stocks began the shortened session on a lower note as global events injected a degree of uncertainty into the market.

The Dow Jones Industrial Average rose 56.14 points, or 0.4%, to close at 14,988.55. The Nasdaq Composite finished up 10.27 points, or 0.3%, at 3,443.67. The S&P 500 advanced 1.33 points, or less than 0.1%, to finish at 1,615.41.

On a sectoral basis, tech and consumer discretionary stocks performed the best. Boeing and Cisco Systems led the Dow components. Shares of Alcoa fell 1.2%, the worst performer on the index after a downgrade from J.P. Morgan analysts. The aluminum giant will kick off second-quarter earnings season on Monday after the bell.

Portugal returned to headlines after two key government officials (finance minister and foreign minister) submitted their resignations. In addition, reports indicate two more ministers (agriculture and social security) are set to follow suit. As a result, the country's benchmark 10-yr yield spiked 85 basis points to 7.31%. In addition Portugal's PSI index fell 5.3%. The concerns regarding the country's future spilled over to other peripheral economies. Italy's 10-yr yield climbed 11 basis points at 4.51% while Spain's benchmark 10-yr yield jumped 14 basis points to 4.70%.

Equities fought back from their opening losses with the technology space pacing the advance. The sector ended with a gain of 0.6% as large components like Apple and Oracle provided notable support.

Today's economic data was plentiful. The initial claims level decreased from an upwardly revised 348,000 (from 346,000) for the week ending June 15 to 343,000 for the week ending June 29. The consensus pegged the initial claims level at 348,000.For the past several weeks, the initial claims level has moved in a slight sawtooth pattern, but overall, trends have been relatively flat. Labor conditions have not materially changed over this time.

June ADP Employment Change came in at 188,000 while the consensus expected a reading of 150,000. In addition, June Challenger Job Cuts rose 4.8% year-over-year to follow the prior month's decline of 41.2%.

The June ISM Services Index was reported at 52.2, below the 54.0 forecast by the consensus, and down from the May reading of 53.7.

Separately, the U.S. trade deficit widened to $45.0 billion in May from an upwardly revised $40.1 billion (from $40.3 billion) in April. That was the largest deficit since November 2012. The consensus expected the trade deficit to increase to $40.8 billion. The goods deficit rose to $63.4 billion in May from $58.4 billion while the services surplus increased to $18.4 billion from $18.3 billion. May exports fell by $0.5 billion from $187.6 billion in April to $187.0 billion.

Bond and equity markets will be closed tomorrow in observance of Independence Day. On Friday, June nonfarm payrolls, nonfarm private payrolls, average workweek, hourly earnings, and the unemployment rate will all be reported at 8:30 ET.