Wall Street set for lower open after weak ADP report

Wall Street set for lower open after weak ADP report
Comment E-mail Print Share
First Published: Wed, Jun 30 2010. 06 49 PM IST
Updated: Wed, Jun 30 2010. 06 49 PM IST
New York: Wall Street was set for a slightly lower open on Wednesday after a weak private sector jobs report reignited concerns about the health of the labor market.
US private employers added a paltry 13,000 jobs in June, compared with a revised gain of 57,000 in May, the ADP Employer Services report showed, falling far short of a forecast of 60,000 job gains.
The data comes ahead a more comprehensive government report on the labor market on Friday.
“Clearly it appears that private sector employers are still reluctant to aggressively add staff,” said Zach Pandl, economist at Nomura Securities International in New York.
“The data is quite concerning,” he said. “If this weaker trend in private sector employment is confirmed on Friday, it would increase the risk of weak growth in the second half of 2010.”
S&P 500 futures fell 1.5 points and below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dropped 13 points, and Nasdaq 100 futures dipped 4 points.
Futures reversed earlier gains that came after financially fragile European banks showed less need to borrow from the European Central Bank (ECB).
The ECB lent banks €131.9 billion ($161.4 billion) in three-month funds, below expectations, as the institutions faced repaying nearly one-half trillion euros in emergency loans on Thursday.
“The amount was half the expectations, and many are breathing a sigh of relief, with European bank stocks leading the rally,” said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
The Institute of Supply Management-Chicago releases its index of manufacturing activity at 9:45 a.m. EDT. Economists forecast a reading of 59.0 in the month versus 59.7 in May.
Hurricane Alex disrupted BP Plc’s cleanup of the massive Gulf of Mexico oil spill, delayed plans to boost containment capacity and threatening to push more oily water onshore. Still, US-traded shares of BP rose 3.9% to $28.73 in premarket trade.
Shares of General Mills Inc fell 4.6% in premarket trade $35.21 after the company forecast earnings below expectations after the bell on Tuesday.
Comment E-mail Print Share
First Published: Wed, Jun 30 2010. 06 49 PM IST