By Chibuike Oguh
NEW YORK (Reuters) -U.S. stocks finished slightly lower in choppy trading on Wednesday following labor market data and comments from a Federal Reserve official that bolster the case for an interest rate cut.
Labor Department data showed that U.S. job openings fell to a 3-1/2-year low in July, indicating continued easing of labor market tightness that could strengthen the Fed's hand to begin cutting rates at its next meeting later this month.
The benchmark S&P 500 and Nasdaq edged to a lower close while the Dow ended slightly higher. Utilities and consumer staples stocks led the gainers while energy and technology equities were the main drag. Six out of 11 S&P 500 sectors ended lower.
"This is always a rocky period in September but the economy is holding up," said Bill Strazzullo, chief markets strategist at Bell Curve Trading in Boston. "The consumer is fine, the labor market is fine. I'm still bullish overall."
Shares of Nvidia (NASDAQ:NVDA), which suffered a massive $279 billion drop in market value on Tuesday, closed 1.7% lower. Shortly before the close of trading, the company denied a media report that it received a subpoena from the U.S. Department of Justice.
Other megacap growth stocks fell, including Apple (NASDAQ:AAPL) which ended 0.9% lower. Microsoft (NASDAQ:MSFT) dipped 0.1%, Alphabet (NASDAQ:GOOGL) dropped 0.5% and Amazon.com (NASDAQ:AMZN) slipped 1.7%. Tesla (NASDAQ:TSLA) shares rose 4.2%.
Raphael Bostic, Atlanta Fed president, said on Wednesday the central bank must not keep interest rates too high much longer or it risks causing too much harm to employment. He added that waiting until inflation falls back to the Fed's 2% goal before cutting rates "would risk labor market disruptions that could inflict unnecessary pain and suffering."
In the previous day's session, all three Wall Street indexes slumped to their biggest one-day loss since early August as investors dumped technology-related stocks in a dour start to September - which is historically the worst month for equities.
"Utility stocks are up today because of weak data in jobs that just bolsters the case that when the Fed meets in about two weeks they are going to cut rates by at least 25 basis points," said Eric Beyrich, co-chief investment officer at Sound Income Strategies.
The Dow Jones Industrial Average rose 38.04 points, or 0.09%, to 40,974.97, the S&P 500 lost 8.86 points, or 0.16%, to 5,520.07 and the Nasdaq Composite lost 52.00 points, or 0.30%, to 17,084.30.
The Philadelphia SE Semiconductor index rebounded from its biggest one-day drop since the COVID-19 pandemic in the previous session and ended up 0.25%.
Advanced Micro Devices (NASDAQ:AMD) rose nearly 3% after it named former Nvidia executive Keith Strier as senior vice president of global AI markets.
Zscaler (NASDAQ:ZS) fell nearly 19% after the company forecast fiscal 2025 revenue and profit below estimates. Dollar Tree (NASDAQ:DLTR) slumped 22% after the discount store operator trimmed its annual sales and profit forecasts.
Total volume across U.S. exchanges was about 10.5 billion shares, down from a 20-day moving average of nearly 11 billion shares.