U.S. stocks rebound after downbeat ADP report
Xinhua, August 6, 2015 Adjust font size:
U.S. stocks traded higher in the morning session Wednesday as investors believed that possibility for the Federal Reserve to raise interest rates in September becomes lower following the soft private payroll data.
By midday, the Dow Jones Industrial Average rose 54.09 points, or 0.31 percent, to 17,604.78. The S&P 500 gained 13.14 points, or 0.63 percent, to 2,106.46. The Nasdaq Composite Index jumped 58.85 points, or 1.15 percent, to 5,164.40.
U.S. private sector employment increased by 185,000 jobs from June to July, well below market consensus of 210,000, according to the June ADP National Employment Report released Wednesday.
The ADP figure is watched closely as a pre-indicator for the nonfarm payrolls data due Friday. Analysts thought that a soft ADP report could give the Federal Reserve an excuse to postpone rate hikes.
"All eyes to Friday's payroll report. While ADP and BLS (Bureau of Labor Statistics) do not move step-by-step, there is a reasonable, directional correlation. Nonfarm payrolls fewer than 200k on Friday will likely push market expectations for a rate hike out to 2016," said Jay Morelock, an economist at FTN Financial, in a note.
Meanwhile, the country's international trade deficit in goods and services increased from a revised level of 40.9 billion U.S. dollars in May to 43.8 billion dollars in June, largely in line with market estimates, said the U.S. Commerce Department Wednesday.
In corporate news, the Walt Disney Company plunged 8.55 percent around midday Wednesday following the release of its weaker-than- expected quarterly revenues.
The entertainment giant reported quarterly earnings of 2.5 billion dollars on revenues of 13.1 billion dollars for its third fiscal quarter ending June 27, 2015, compared to 2.2 billion dollars on revenues of 12.5 billion dollars for the prior-year quarter.
On Tuesday, U.S. stocks declined for the third straight session as investors digested a batch of corporate earnings reports. Endite