US open: Stocks fall amid oil slump, geopolitical tensions

US stocks fell on Wednesday as a better-than-expected private payrolls report was offset by a tumble in oil prices, geopolitical tensions and China worries.

The Dow declined 1.21%, the Nasdaq decreased 1.42% and the S&P 500 slipped 1.27% at 1434 GMT.

According to private consultancy ADP, US employers added 257,000 jobs in December compared with a downwardly-revised tally of 211,000 jobs in October and expectations for a 200,000 gain. The report comes ahead of the official monthly non-farm payrolls report on Friday.

The upbeat data did little to bolster markets as oil prices continued to slide. West Texas Intermediate crude plunged 4.02% to $34.58 per barrel and Brent dropped 5.07% to $34.66 per barrel at 1431 GMT.

Worries in Asia escalated after North Korea said it had successfully carried out an underground hydrogen bomb test. The news came after a 5.1 magnitude tremor was detected close to the nuclear test site at Punggye-ri, which monitors said was unlikely to be natural.

Meanwhile, concerns about China's economic slowdown showed no signs of abating after services data missed expectations.

Caxin's China services purchasing managers index fell to 50.2 in December from 51.2 the previous month, although it was above the 50 level that separates expansion from contraction.The report follows weak manufacturing data on Monday.

Markit's US PMI was revised higher to 54.3 in December from 53.7, beating forecasts for a reading of 54.

Mortgage applications in the US fell 11.6% in the week to 1 January, according to the Mortgage Bankers' Association.

Still to come, ISM releases US services PMI at 1500 GMT and factory orders figures are due at 1500 GMT.

The Federal Reserve will also publish minutes of its 15-16 December policy meeting at 1900GMT, which will reveal more details behind the central bank's decision to raise interest rates for the first time in almost a decade.

Fed vice chairman Stanley Fischer told CNBC on Wednesday that the market's expectation that the central bank will only raise interest rates twice in 2016 are too low.

The Fed sees four rate hikes this year but Fischer said this was more "in the ballpark", adding that it will depend on economic developments. "We don't know enough now to know how many (rate hikes) there will be," Fischer said.

On the company front, Apple was on the back foot after reports late on Tuesday that it plans to scale back production of iPhones, partly reflecting recently lower than expected sales.

Pioneer Natural Resources also fell after it announced a 10.5m share offering.

The dollar rose 0.31% versus the pound and increased 0.03% against the euro but was down 0.37% against the yen.