US open: Stocks inch higher after poor data
It was a tentative start for stocks on Wall Street on Wednesday as investors digested yet more disappointing economic data and tried to predict what it could mean for future monetary policy.
After the first 20 minutes of trade, the Dow was up 0.4%, the S&P 500 edged 0.2% higher, while the Nasdaq was flat.
Stocks rose sharply on Tuesday – the Dow gained 0.9%, while the S&P 500 rose 1.5% and the Nasdaq jumped 1.7% – as bond yields dropped following worse-than-expected consumer confidence and job vacancies data.
"What appears to be bad news for the US economy is being notched up as good news for equities with a weakening jobs snapshot and slide in consumer confidence lifting indices," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. "Signs of America’s cooling economy have raised hopes that the pause button will be pushed on punishing interest rate hikes."
ADP report, GDP revision in focus
Wednesday morning saw the release of ADP's National Employment Report, which found that a net 177,000 jobs were created in August, down from 324,000 in July and 455,000 in June. Economists were expecting a figure closer to 200,000.
However, ADP chief economist Nela Richardson said this month's numbers are more consistent with the pace of job creation before the pandemic. "After two years of exceptional gains tied to the recovery, we're moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede," Richardson said.
US gross domestic product expanded by just 2.1% between April and June, compared with the 'advance' estimate of 2.4% growth, according to the Bureau of Economic Analysis. However, it was slightly higher than the revised 2% growth seen in the first quarter.
Meanwhile, the US trade deficit in goods increased 2.6% to $91.2bn in July, according to the Commerce Department.
Tech stocks in focus
Computer giant HP shares tanked after the company posted a third-quarter revenue figure of $13.2bn, short of the $13.4bn expected by analysts.
Salesforce and Dell earnings are due out after the closing bell.
Texas Instruments was out of favour after analysts at Bernstein cut their rating on the chipmaker from 'market perform' to 'underperform'.
Cloud storage firm Box slumped after reporting underwhelming guidance for the full year.