UPDATE: More economic news following the week ADP jobs report provides further evidence that the middle class is disappearing, leaving only wealthy jobs for a few and expansion in the industry who – I guess – should be honored that they can wait on them – that’s progressivism at work.
The Institute for Supply Management’s gauge of service-sector activity ticked up to 53.7 in May from 53.1 in April, besting estimates of 53.5, and suggesting the sector is still growing. Readings above 50 point to expansion, while those below point to contraction.
This has been the general trend in the jobs data for the Obama recovery, as middle class jobs become far and few between and a U.S. manufacturing industry wavers. Another excuse for progressives to funnel federal funds to their friends couched as “shovel ready jobs” that “weren’t as shovel ready as” the Obama administration thought.
Earlier on Wall Street
U.S. private employers added 135,000 jobs in May, falling short of economists’ expectations, a report by a payrolls processor showed on Wednesday. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 165,000 jobs.
April’s private payrolls were revised down to an increase of 113,000 from the previously reported 119,000. The report is jointly developed with Moody’s Analytics.
U.S. stock-index futures pointed lower ahead of a jam-packed day for Wall Street, including a key report on private-sector payrolls. The ADP National Employment Report shows the U.S. private sector added 135,000 jobs in May, missing expectations of 165,000 being created.
Earlier in Today’s Markets
As of 8:03 a.m. ET, Dow Jones Industrial Average futures fell 56 points to 15123, S&P 500 futures dipped 7.3 points to 1624 and Nasdaq 100 futures slumped 11.8 points to 2963.
For Wall Street, it’s all about quantitative easing. Any hints on when the Federal Reserve will taper off on the QE3 program have driven the markets higher and lower in recent weeks.
The pace of economic data is heating up, giving traders fresh clues, as the big monthly jobs report looms on Friday.
The U.S. private sector is forecast to have tacked on 165,000 jobs in May from April, economists said ahead of an 8:15 a.m. ET report from payroll processor ADP. The data are generally seen as a leading indicator ahead of the Labor Department’s report; however, it’s not a perfect correlation.
The Fed is looking to push the unemployment rate — seen as heading steady at 7.5% in May — down through its conventional and unconventional monetary policy. Oftentimes in recent weeks, better-than-expected data on that front have pressured stocks as traders worry it could signal an early end to QE.
A report due at 10:00 a.m. ET from the Institute for Supply Management is expected to show the U.S. services sector having expanded at a slightly swifter pace in May than it did in the month prior, with the non-manufacturing PMI gauge climbed to 53.5 from 53.1.
Then in the afternoon, at 2:00 p.m. ET, the Fed releases its Beige Book report. The report provides an anecdotal look at how the economy is performing across the central bank’s 12 districts. Since it is viewed directly by policymakers, the report frequently moves the markets.
In corporate news, Apple (AAPL) took a loss in its patent battle with Samsung. The U.S. International Trade Commission ruled against the tech giant and might impose an import ban on certain older models of iPhone and iPad devices. UnitedHealth (UNH), the blue-chip health insurer, boosted its dividend 32% and restarted its share buyback program.
The Japanese Nikkei 225 was pummeled overnight, plunging 3.8%, as investors there grew concerned about Prime Minister Shinzo Abe’s plan to revive the country’s economy. Japanese markets are still up 23.3% for the year, widely outpacing the 14% gain seen in the S&P 500.
Oil and gasoline prices ticked up. The benchmark U.S. crude oil contract climbed 42 cents, or 0.44%, to $93.72 a barrel. Wholesale New York Harbor gasoline gained 0.12% to $2.822 a gallon. Gold was little changed at $1,397 a troy ounce.
Foreign Markets
The Euro Stoxx 50 sold off by 1.1% to 2727, the English FTSE 100 dropped 1.4% to 6470 and the German DAX fell 0.85% to 8225.
In Asia, the Japanese Nikkei 225 plunged 3.8% to 13015 and the Chinese Hang Seng tumbled 0.97% to 22069.
