US stock market retreated on Wednesday as disappointing private sector job gains and a decline in productivity undermined investor confidence. The dollar strengthened, the live dollar index shows the ICE US Dollar index edged up 0.2% to 93.248. The Dow Jones Industrial Average fell 0.6% to 17651.26, led by a 2.8% drop in Caterpillar and a 1.9% decline in Goldman Sachs. The S&P 500 slipped 0.6% to 2051.12 led by energy and industrial stocks. The Nasdaq Composite lost 0.8%.Weak employment and labor productivity data indicated US economic growth is not showing visible signs of improvement. Automatic Data Processing Inc report indicated private sector employment fell unexpectedly to 156000, well below the 195000 jobs growth expected. The labor productivity fell by a 1% annual rate in the first quarter, the fourth decline in the past six quarters. The ADP report is widely used as a predictor of the important nonfarm payroll data which are used by the Federal Reserve policy makers, together with inflation data, in setting the monetary policy and interest rates. April jobs report is due on Friday and a weak jobs number will lower the already slim likelihood of an interest rate hike in June. Other data were more positive: the US trade deficit fell in March to its lowest level in more than a year, factory orders rose modestly in March and ISM Services PMI for April came in slightly stronger than expected. Nevertheless, the mixed economic data failed to bolster market sentiment. Today at 14:30 CET Initial Jobless Claims and Continuing Claims will be released in US. The tentative outlook is positive. At 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency. At 17:30 CET Federal Reserve Bank of St. Louis President James Bullard will speak on US economy and monetary policy in Santa Barbara, US.
European stocks closed lower on Wednesday for a fourth straight session on mixed corporate earnings reports and weaker than expected economic data. The euro was little changed against the dollar trading at $1.1496 compared with $1.1499 late Tuesday in New York. The Stoxx Europe 600 index closed down 1.1%. Dialog Semiconductor was among the Stoxx 600’s worst performers: chipmaker shares sank 8.6% on lower first quarter profit announcement. Germany’s DAX 30 fell 1% to 9828.25, France’s CAC 40 lost 1.1% and UK’s FTSE 100 dropped 1.2%. Economic data indicated retail sales in the euro-zone fell 0.5% in March compared with the previous month, and flash services PMI for April was revised downward from 53.2 to March’s reading of 53.1. Today at 10:00 CET ECB Economic Bulletin will be published. And at 10:10 CET April Retail PMI for euro-zone will be released by Markit. At 10:30 CET April Services PMI will be published in UK. The tentative outlook is negative.
Asian stocks are recovering from early losses on mixed economic data today: the Caixin/Markit survey showed China’s Services PMI dropped to 51.8 in April from 52.2 in March, still indicating expansion in services sector as firms resumed hiring. Shanghai Composite Index is up 0.23% at 2998.14, Australia’s All Ordinaries Index is 0.17% higher.
Oil futures prices are rising today as continued wildfire in oil sands region in Alberta, Canada disrupted Canada’s oil production while Libya’s oil output has fallen to less than a quarter of its 2011 high of 1.6 million barrel per day as rival political factions struggle for control.
Gold is edging higher today after spot gold lost 1.1% in the past three sessions. Gold jumped to a 15-month high of $1303.60 on Monday as the dollar slumped against the yen following Bank of Japan decision not to expand stimulus measures.