Stocks were higher today after a two day rout. U.S. equities finished modestly higher in a choppy session, with investors weighing mixed trade sentiment, as the U.S. is prepared to increase tariffs on European goods and China is set to head to the U.S. for high-level talks next week. But, the persistent global growth uneasiness that has been at the heart of the selling pressure over the past two sessions, following a host of soft manufacturing data, was met with a larger-than-expected drop to a 3-year low in key U.S. services growth, fostering Fed rate cut hopes that likely tempered some of the negative sentiment. Treasury yields were again sharply lower, while the U.S. dollar and crude oil prices fell, and gold was higher amid the uneasiness. In equity news, PepsiCo topped Q3 expectations, but Clorox lowered its guidance and Tesla missed on Q3 vehicle deliveries.

The Dow Jones Industrial Average (DJIA) rose 123 points (0.5%) to 26,201, the S&P 500 Index gained 23 points (0.8%) to 2,911 and the Nasdaq Composite increased 87 points (1.1%) to 7,873. In moderate volume, 801 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq. WTI crude oil moved $0.19 lower to $52.45 per barrel and wholesale gasoline was $0.01 higher at $1.56 per gallon. Elsewhere, the Bloomberg gold spot price rose $6.30 to $1,505.75 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.1% lower at 98.92.

The September Institute for Supply Management (ISM) non-Manufacturing Index fell to 52.6 from August’s 56.4, and versus the Bloomberg forecast of a dip to 55.0, though a reading above 50 denotes expansion. The index hit the lowest level since August 2016 as new orders and business activity both retreated solidly back below 60, and employment dipped to 50.4, though growth in prices accelerated. Non-manufacturing activity accounts for a large majority of U.S. economic output. The ISM said the respondents are mostly concerned about tariffs, labor resources and the direction of the economy.

Weekly initial jobless claims rose by 4,000 to 219,000, versus estimates of 215,000, with the prior week’s figure being revised higher by 2,000 to 215,000. The four-week moving average was unchanged at 212,500, while continuing claims declined by 5,000 to 1,651,000, south of estimates of 1,654,000.

Factory orders dipped 0.1% month-over-month (m/m) in August, versus expectations of a 0.2% decline, and compared to July’s unrevised 1.4% gain. Stripping out the volatile transportation component, orders were flat, versus July’s downwardly-adjusted 0.2% rise. Final durable goods orders, preliminarily reported last week, were unrevised at a 0.2% m/m rise for August, and orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, were revised lower to a 0.4% decrease.

Treasuries continued to rally, as the highly-expected services sector data followed some further softening in global manufacturing reports to exacerbate recession concerns, headlined by Tuesday’s drop to a 10-year low in output for the U.S. sector. The yield on the 2-year note dropped 11 basis points (bps) to 1.37%, the yield on the 10-year note decreased 6 bps to 1.53% and the 30-year bond rate declined 5 bps to 2.04%.

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