Wall Street Opens Slightly Higher After Another ADP Jobs Miss; Dow Flat
By Geoffrey Smith
Investing.com -- U.S. stock markets edged higher at the open on Wednesday, after payrolls processor ADP's monthly report on private-sector hiring hinted at a slowdown in the job market recovery and, consequently, a higher likelihood of continued monetary stimulus.
By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up a mere 10 points, less than 0.1%, at 35,371 points. The S&P 500 was up 0.1% and the Nasdaq Composite was up 0.5%.
ADP said private payrolls expanded by 374,000, an acceleration from last month's 326,000 but far less than the 650,000 expected. Market participants took the news in their stride, mindful of the huge gap last month between the ADP's payrolls number and the government's much stronger data.
Greg Daco, an analyst with Oxford Economics, called the figures "underwhelming", pointing to a marked lag in hiring by small businesses, which added only 86,000 last month.
Among individual movers, Lucid Motors stood out with an 11% drop in anticipation of heavy selling by early investors as a lockup on early backers ends. Other electric vehicle makers were under pressure as Nio became the latest to revise down its deliveries guidance due to component shortages. Nio (NYSE:NIO) ADRs fell 2.7%. Tesla (NASDAQ:TSLA) stock appeared to benefit from switches within the sector, rising 0.5% despite reports of another incident in which a Tesla car using its Autopilot software failed to identify a stationary police car.
Railroad stocks were also in focus after the unraveling of Canadian National Railway 's (NYSE:CNI) takeover bid for Kansas City Southern (NYSE:KSU). CNR's voting trust arrangement was refused by U.S. regulators on Tuesday, amid broader concern in Washington at the consolidation of market power in the railroad sector. That leaves the earlier, lower bid from Canadian Pacific (NYSE:CP) as likely to go through.
Canadian Pacific stock rose 3.5%, while CNR rose 5.1% on relief that it had avoided an expensive and deal in a difficult regulatory environment. Kansas City Southern stock rose 2.5%.after falling sharply on Tuesday.
Elsewhere Crowdstrike (NASDAQ:CRWD) overcame initial wobbles to rise 0.6% after raising its guidance slightly on the back of strong growth numbers after the bell on Tuesday. The company's valuation of some 20 times expected 2021 sales, after a sixfold rally since the start of the pandemic, has left the cybersecurity expert exposed to any sign of growth slowing. Zoom Video (NASDAQ:ZM), another software company that fell sharply on Tuesday after failing to match heroic growth expectations, recovered 3.0%.
PVH (NYSE:PVH), which has the opposite valuation problem, rose 16% after the parent company of fashion brands Calvin Klein and Tommy Hilfiger also reported better-than-expected results, notably from its reopened stores in Europe.
There was little impact on oil stocks from the meeting of OPEC and its allies in Vienna, Austria, where the world's largest oil producers seemed ready to agree not to change course as regards their output policy at this month's regular review of production quotas.
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