Wall Street opens lower on tepid ADP jobs data

This file photo taken on Feb 16, 2017 shows a street sign near the New York Stock Exchange in New York.
This file photo taken on Feb 16, 2017 shows a street sign near the New York Stock Exchange in New York.PHOTO: AFP

WASHINGTON (REUTERS) - Wall Street opened lower on Thursday (July 6) amid broad declines after data showed the US 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 US 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 (9:34 p.m. Singapore time), the Dow Jones Industrial Average was down 52.8 points, or 0.25 per cent, at 21,425.37 and the S&P 500 was down 8.65 points, or 0.35 per cent, at 2,423.89. The Nasdaq Composite was down 35.20 points, or 0.57 per cent, at 6,115.66. All the 11 major S&P 500 sectors were lower, with the tech sector's 1.08 per cent 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 per cent in May and has run below the 2 per cent 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.