US STOCKS-Tepid ADP jobs data drags down Wall Street

* 158,000 private jobs added in June vs. est. 185,000 -ADP

* Weekly jobless claims rise for third straight week

* Tesla slips after Model S fails to ace some tests

* Indexes down: Dow 0.25 pct, S&P 0.35 pct, Nasdaq 0.57 pct
(Updates to open)

By Tanya Agrawal

July 6 (Reuters) – Wall Street opened lower on Thursday amid
broad declines after data showed the U.S. private sector added
fewer jobs than expected in June.

The ADP National Employment Report showed private employers
added 158,000 jobs in June, below the estimated addition of
185,000.

The report by payrolls processor ADP acts as a precursor to
monthly nonfarm payrolls data, due on Friday, that includes
hiring in both the public and private sectors.

Another set of data showed weekly jobless claims rose for
the third straight week, with claims climbing to 248,000, above
the 243,000 expected.

“The ADP number has some correlation to the U.S. NFP
(nonfarm payrolls) and investors always adjust their
expectations on the back of this,” said Naeem Aslam, chief
market analyst at Think Markets UK Ltd.

“But overall we think that the number is not that bad
because this is the only second time that we have seen a miss.”

At 9:34 a.m. ET (1334 GMT), the Dow Jones Industrial Average
was down 52.8 points, or 0.25 percent, at 21,425.37 and
the S&P 500 was down 8.65 points, or 0.35 percent, at
2,423.89.

The Nasdaq Composite was down 35.20 points, or 0.57
percent, at 6,115.66.

All the 11 major S&P 500 sectors were lower, with the tech
sector’s 1.08 percent fall topping the list.

Investors are also parsing minutes from the Federal
Reserve’s last meeting that showed policymakers were
increasingly split on the outlook for inflation and how it might
affect the future pace of interest rate hikes.

The Fed’s preferred measure of underlying inflation slipped
to 1.4 percent in May and has run below the 2 percent target for
more than five years now.

The minutes revealed a few officials viewed equity prices as
high when compared to standard valuation measures, even though
earnings growth has been robust.

The S&P 500 has been trading at about 18 times earnings
estimates for the next 12 months, compared with the long-term
average of 15 times.

Shares of Tesla fell 3 percent after the luxury
electric carmaker’s Model S did not get the top score in certain
tests by the Insurance Institute for Highway Safety.

General Electric slipped 1.5 percent after the
European Commission accused the company of providing misleading
information during a merger deal.

Costco rose 1.3 percent after the retailer reported
a rise in its June sales number.

Declining issues outnumbered advancers on the NYSE by 2,027
to 544. On the Nasdaq, 1,734 issues fell and 472 advanced.
(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil
D’Silva)

Leave a Reply

Your email address will not be published.