MarketView for October 3

Summary

The major equity indexes ended the day on an upswing on Wednesday, the result of stronger-than-expected labor and service-sector data. However, they came off their highs by late afternoon trading on lingering concerns about the global economy. A gloomier outlook in China and Europe weighed on commodity prices and hit energy and materials shares. In addition, the Dow Jones Industrial Average felt the effects of a strong slide in the price of the shares of Hewlett-Packard. Hewlett-Packard ended the day down 13 percent to close at $14.91, after falling as low as $14.85.

Hewlett-Packard’s shares fell after CEO Meg Whitman warned on Wednesday of a darker outlook for 2013 earnings, reflecting slow progress a turnaround plan while at the same time having to deal with lower technology spending. Hewlett-Packard, the largest domestic technology company by revenue, forecast that its earnings will slide sharply next year, compared with Wall Street's expectations for flat profits.

Part of the day’s economic data indicated that services sector growth picked up steam in September, defying economists' expectations for a slight decrease, while last month, the private sector added more jobs than forecast. The data comes ahead of the closely watched monthly U.S. non-farm payrolls report on Friday.

The S&P's consumer discretionary sector index rose 0.8 percent, helped by stocks like Amazon, up 2.1 percent at $255.92, and homebuilders like the PulteGroup, whose shares ended the day up 6 percent to close at $16.50.

Prices of crude oil and metals were lower, pressuring stocks in the energy and basic materials sectors after the euro zone looked unable to dodge a recession based on a reading of purchasing managers indexes last month. At the same time, China's slowdown looked likely to extend to a seventh quarter.

The S&P energy index fell 1.1 percent. Chevron Corp was also lower by 1.5 percent, falling to $116.14, and dragging on the Dow. Early in the session, the Dow climbed as high as 13,536.27, while the S&P 500 hit an intraday high at 1,454.30. The Nasdaq rose to an intraday high at 3,142.36.

Apple ended the day up 1.5 percent to close at $671.45, while Google saw its share price close out the regular trading day up 0.7 percent at $762.50.

Best Buy gained 4.7 percent to close at $17.76 as founder Richard Schulze and at least four private-equity firms started examining its books, in early steps toward what could become an $11 billion buyout.

The proportion of bullish investment advisors fell below 50 percent for the first time in five weeks, hitting 46.8 percent in the latest week versus 51 percent the previous week, according to a survey by Investors Intelligence on Wednesday.

Investors often see bullishness as a contrarian indicator, meaning that when bullishness is running high, the market may be due for a pullback. Investors Intelligence said a reading of 55 can often signal a market top.

Earlier in the session, Nasdaq canceled some trades in shares of Kraft Foods that had pushed the stock up about 29 percent in just one minute, the latest in a string of trading glitches that have rattled market confidence. Kraft shares ended the day down 1.2 percent at $44.87.

Shares of Family Dollar Stores rose 3.9 percent to $68.56 after the discount chain posted a higher quarterly profit.

Not all was rosy, though, on the earnings front. Monsanto fell 2.2 percent to $88.59 after the agribusiness group posted a fourth-quarter loss during a seasonally sluggish sales period.

About 6.2 billion shares changed hands on the three major equity exchanges as compared with the average daily volume of 6.38 billion shares.