US open: Mixed start to trading as traders digest jobs numbers
Wall Street trading got off to a mixed start on Thursday as market participants thumbed over a number of data points in an effort to gain more insight into the current state of the US economy.
As of 1525 BST, the Dow Jones Industrial Average was down 0.11% at 40,929.91, while the S&P 500 advanced 0.27% to 5,535.04 and the Nasdaq Composite came out the gate 0.87% firmer at 17,232.67.
The Dow opened 45.06 points lower on Thursday, reversing modest gains recorded in the previous session.
Data was in focus early on Thursday, with ADP revealing that private sector employment in the US rose much less than expected in August, increasing by 99,000 from July, versus expectations for a 145,000 jump. Meanwhile, July's gain was downwardly revised to 111,000 from 122,000. The data also showed that year-over-year pay gains were flat, remaining at 4.8% for job-stayers and 7.3% for job-changers.
Elsewhere on the macro front, Americans lined up for unemployment benefits at a decelerated pace in the week ended 31 August, according to the Department of Labor. Initial unemployment claims dropped by 5,000 week-on-week to 227,000, a seven-week low and below market expectations for a reading of 230,000. Despite the decline, claims remained significantly above averages seen earlier in 2024, as the US labour market continued to soften since its post-Covid peak but remained historically tight.
Moving on, US job cuts rose to 75,891 in August, according to data from Challenger, Gray and Christmas, a sharp increase from July's reading of 25,885, while the Bureau of Labor Statistics said nonfarm business sector labour activity had increased by 2.5% in Q2, up from preliminary estimates of 2.3% and expanding on Q1's 0.4% increase.
Still on data, S&P Global's composite PMI was upwardly revised to 55.7 in August from a preliminary reading of 55.2, the service sector's strongest growth since March 2022 as business activity was boosted by stronger new order inflows, while the composite PMI was also upwardly revised to 54.6 from 54.1, signalling a 19th consecutive month of expansion in the US private sector.
Finally, the Institute for Supply Management's services PMI edged higher in August, up from 51.4 in July to 51.5 last month, above market expectations for a fall to 51.1 and extending positive momentum for US service providers. New orders were up six basis points at 53 to reflect robust demand.
In the corporate space, Verizon Communications has agreed to buy Frontier Communications, the largest pure-play fibre internet provider in the US, as part of a $20.0bn cash deal.
Reporting by Iain Gilbert at Sharecast.com
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