June 4 - Summary: S&P 500 hits another record as a surge in services activity overshadowed softer-than-expected private hiring; Citigroup's $285 million fraud fine reinstated; GM to publish recall report Thursday. Conway G. Gittens reports.
Wall Street flirted with new records but volume continues to be light ahead of key events in the U.S. and Europe. The Dow gained 15 points, the S&P 500 closed at a lifetime high, the Nasdaq rose 17 points. The U.S. services sector powered ahead in May, topping forecasts with the strongest expansion in nine months. The Institute for Supply Management says orders are up and hiring is stronger. But on the flip side, separate data from payroll processor ADP show private companies didn't hire as many workers in May as economists expected. The figures come before a big government jobs report on Friday, but it does not have a good record predicting the actual number of total job creation. Sophii Weng is a U.S. based economist for Standard Chartered. SOUNDBITE: SOPHII WENG, ECONOMIST, U.S. ECONOMIST, STANDARD CHARTERED (ENGLISH) SPEAKING: "There is around 45,000 gap between ADP and non-farm payroll in last twelve months, but we do think that the ADP number indicates that the risk of another strong non-farm payroll figure like the April's 288,000 is fading." One more economic stat to consider: The U.S trade gap with the rest of the world ballooned in April to its widest in two years, suggesting imports, which weighed heavily on growth in the first three months of the year, will continue to be a drag this quarter. In corporate headlines: Citigroup will have to shell out $285 million in a fraud settlement with the U.S. Securities and Exchange Commission. A Federal appeals court overturned an earlier ruling to reject the deal. And General Motors is expected, on Thursday, to release the findings of the company's internal probe into why it took so long to do something about a defective ignition switch linked to at least 13 deaths. Shares of GM climbed roughly 3.6 percent. Among the biggest movers on Wednesday... U.S. insurer Protective Life jumped 18 percent after Japan's Dai-ichi Life Insurance agreed to buy it. And shares of the business software maker Tibco Software were down 5 percent after the company said its profit for the second quarter will be much lower than expected. In Europe, stocks held steady after data confirmed a slowdown in the euro zone's economic recovery.