Stock Market Today: The Dow Has Record Territory in Its Sights

The Dow wasn't deterred by a lousy ADP payrolls report or a record U.S. budgetary shortfall, jumping Wednesday to close in on new highs.

(Image credit: Getty Images)

The stock market came out swinging today for a second straight September session despite little news to justify the optimism.

While the Centers for Disease Control and Prevention extended an eviction moratorium through the end of the year, sparing millions of renters, the economy doled out several warning signals. For one, ADP's private-sector jobs report showed just 428,000 payroll additions in August, far less than the 1 million expected.

Dow Stocks: The Pros' Third-Quarter Rankings

"On the plus side, the August reading still showed a month-over-month increase of 216K payrolls," says Nick Juhle, director of investment research at $14B trust-only bank Greenleaf Trust. "On the downside, the ADP estimate was lower than the (Bureau of Labor Statistics) estimate for Friday and it still missed. This could either suggest that we are in for a light report on Friday or further highlight the recent divergence in outcomes from the two sources.

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"Either way, hiring has slowed significantly since the initial snapback in May and June. The labor market rebound remains gradual with unemployment well above pre-pandemic levels, and significant headwinds remain."

Meanwhile, the Federal Reserve's latest "Beige Book" survey of the economy further illustrated a slowing recovery. "Continued uncertainty and volatility related to the pandemic, and its negative effect on consumer and business activity, was a theme echoed across the country," the report reads.

And the Congressional Budget Office revealed the U.S. will run an all-time-high $3.3 trillion deficit for the fiscal year ending Sept. 30, with U.S. debt set to exceed GDP in 2021 for the first time since World War II.

But none of that snuffed stocks' momentum. The Dow Jones Industrial Average shot 1.6% higher to 29,100 to come within 451 points of its February highs. The Dow's advance was led by Coca-Cola (KO (opens in new tab), +4.2%) and International Business Machines (IBM (opens in new tab), +3.9%).

Other action in the stock market today:

  • The S&P 500 surged 1.5% to a record 3,580.
  • The Nasdaq Composite gained 1.0% to a record 12,056.
  • The small-cap Russell 2000 improved by 0.9% to close at 1,592.

The Few Cheap Stocks Left

Naturally, when stocks get this high into the clouds, it becomes more difficult to find a few things.

Sufficient yields, for instance, are a rarity at this point. The S&P 500's yield has dipped below 1.7%, and the Dow barely delivers above 2%. But investors have a few high-income options to mull over, including these seven stocks with safe payouts, and, for those who like to diversify, these five high-yield ETFs.

It also might seem difficult to find a decent value at these breathtaking heights. For instance, while the exact data differs depending on the data provider, the S&P 500's value compared to forward-looking earnings is at levels last seen during the early aughts.

But the split nature of this market means hundreds of stocks haven't participated nearly as fully in the rally of the past few months – in fact, several values still exist.

Here, we evaluate 11 value stocks that not only are trading at lower-than-usual multiples, but boast several other qualities, such as steady (and even rising) dividends, strong cash generation and positive analyst expectations.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.