US stocks dipped at the start of trading as investors assessed soft economic data ahead of impending jobs report.
Automatic Data Processing Inc reported that private payrolls rose by about 189000 in March. The data, backed by forecasting firm Moody Inc, was weaker than the 225,000 jobs’ rise forecasted by analysts polled by the Wall Street Journal.
“There’s definitely been some kind of negative impact from the weather” on the labor market,” said Robert Pavlik, chief market strategist at Boston Private Wealth LLC.
“That’s adding to concerns that Friday’s employment report could miss expectations, though the recovery in the labor market remains healthy,” he added.
The Standard and Poor’s 500 Index dipped 14 points or 0.8 % at 10.00 am in New York top 2,053 points just after eking out a 0.4% quarterly growth at the close of trading on Tuesday. In Wednesday morning trading, the benchmark index slipped below its 100-day average price.
The S&P’s quarterly gain, however trailed most developed indexes with the Stoxx 600, the European benchmark advancing more than 16% and the Japanese Topix jumping 9.6% for the same three month period.
The Dow Jones Industrial Average tumbled 200.1 points or 1.1% in early trading but pared losses to trade most recently at a 0.7% low of 17648 points. The blue-chip index recorded massive declines on Tuesday to close the first quarter in negative territory.
The Nasdaq Composite slipped 34 points or 0.7% just a day after continuing its longest winning streak in history boosted by biotech stocks.
The data released by the ADP comes just two days before Friday’s jobs report. The report is widely expected to give the strongest indication yet on the strength of the economy.
The Federal Reserve Chairwoman, Janet Yellen had earlier indicated that the Fed would hike the interest rates after it deems the economy to be strong enough to withstand the raise.
“Markets have been trading sideways, with the S&P having difficulty breaking above 2,100, but bad news could become good news if that means the Fed will hold off on raising rates a bit longer,” David Lebovitz, global market strategist for J.P. Morgan Asset Management in New York, told Reuters.
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