The main indexes were choppy in Wednesday's abbreviated session. Although volume was thin ahead of tomorrow's stock market holiday, there were plenty of headlines to sift through for those who stuck around.
Jobs data dominated the economic headlines. For one, the Labor Department said initial jobless claims rose by a more-than-expected 4,000 last week to 234,000.
Separate data from ADP showed private payrolls added 150,000 new jobs in June. That was below what economists were expecting and represented the smallest gain in five months. The report also showed that wages for job stayers increased 4.9% year-over-year, the smallest annual increase since August 2021.
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However, the most-anticipated event on this week's economic calendar is the monthly jobs report, due out Friday morning.
Outside of the labor market, data from the Institute for Supply Management (ISM) showed its Services Purchasing Managers Index (PMI) unexpectedly slipped into contraction territory in June, falling to 48.8% from May's 53.8%. This is the second time in three months the index has come in below the 50 level, indicating decelerating activity.
Today's busy batch of data helped boost expectations that rate cuts could start sooner rather than later. According to CME Group's FedWatch Tool, futures traders are now pricing in a 67% chance the first quarter-point rate cut will come in September, up from 63% one day ago.
Southwest adopts a poison pill
In single-stock news, Southwest Airlines (LUV, +1.6%) said its board of directors approved a shareholder rights plan after activist investor Elliott Management disclosed an 11% stake in the discount air carrier last month.
The rights plan, also known as a poison pill, will go into effect once a shareholder accumulates a 12.5% stake in Southwest and is meant to protect LUV investors.
Paramount jumps nearly 7% on latest M&A update
Elsewhere, Paramount Global (PARA) jumped 6.9% today on news Skydance Media has reportedly reached a preliminary agreement to buy National Amusements, which owns roughly 77% of PARA's voting stock. The various parties have been embroiled in complicated buyout talks for some time now and this latest move paves the way for a potential Paramount-Skydance merger, according to The Wall Street Journal.
Paramount stock is a former member of the Berkshire Hathaway equity portfolio, with Warren Buffett & Co. initiating a stake in the media company in Q1 2022. However, at Berkshire's annual meeting in May, Buffett said the holding company exited its stake, adding "we lost quite a bit of money" on the position.
As for the main indexes, the Nasdaq Composite rose 0.9% to 18,188 and the S&P 500 gained 0.5% to 5,537, both new record closes. The Dow Jones Industrial Average slipped 0.06% to 39,308.
Editor's note: This article initially stated that Paramount is still a member of the Berkshire Hathaway portfolio. It has been updated to reflect that the holding company sold out of its PARA stake in Q2 2024.
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