Market Snapshot: Dow futures rise 200 points ahead of ADP employment report that could show 20 million job losses in April
The ADP report comes two days ahead of the more closely followed Labor Department monthly jobs update
U.S. stock-index futures on Wednesday were higher but off the best levels seen overnight as an update on private-sector employment showed the devastation wrought to the labor market by the COVID-19 pandemic.
Investors also parsed corporate quarterly updates from some of the nation’s largest companies, with Walt Disney Co. profit diving more than 90% in the second quarter due to the hit from the viral outbreak on the entertainment giant.
How are stock benchmarks faring?
Futures for the Dow Jones Industrial Average
were up 95 points, or 0.4%, at 23,856, those for the S&P 500 index
gained 12.20 points, or 0.4%, at 2,870.50, while Nasdaq-100 futures
gained 46.75 points, or 0.5%, at 8,971.50.
On Tuesday, the Dow
gained 133.33 points, or 0.6%, to end at 24,883.09, the S&P 500 index
advanced 25.70 points to finish at 2,868.44, a gain of 0.9%, while the Nasdaq Composite Index
added 98.41 points, or 1.1%, to close at 8,809.12.
What’s driving the market?
The stock market has eked out gains over the past two sessions, and was looking for a third, as appetite for equities has overcome concerns about the coronavirus pandemic that has slowed its spread across the country, but still leaves uncertainty about the path forward for the economy.
Labor-market data from payment processor Automatic Data Processing Inc.
showed private-sector employers shed 20.2 million jobs in April, closely matching the consensus estimate from economists polled by Econoday. Last month, ADP’s data didn’t reflect the full scale of the employment picture that has left more than 30 million Americans without jobs in less than two months.
The private-sector employment number comes a day before the weekly U.S. jobless claims report and ahead of the more closely followed nonfarm-payrolls report on Friday.
The illness derived from COVID-19 has infected 3.6 million people world-wide, and a third of that figure is in the U.S. alone, according to data compiled by Johns Hopkins University as of early Wednesday. More than 250,000 lives have been lost globally.
President Donald Trump, speaking during an interview with ABC’s “World News Tonight” Tuesday evening, said “it’s possible there will be some” additional deaths as dozens of states attempt to reopen their economies closed to help stem the contagion. He indicated that restarting business activity was paramount.
“We have to get our country open and we have to get it open soon,” said the president, who was visiting a Honeywell International
plant in Arizona, said during the interview.
Companies, however, continue to be hit by the impact of forced closures, which may have lasting effects even after lockdown procedures are phased out.
On Tuesday, markets lost altitude after Federal Reserve Vice Chairman Richard Clarida told CNBC in an interview that the U.S. economy likely will need more support, though he added that he was expecting a second-half recovery to growth.
“We’re in a period of some very, very, very hard and difficult data that we’ve just not seen for the economy in our lifetimes, that’s for sure,” Clarida told the business network.
The comments from the Fed’s No. 2 weren’t necessarily surprising, but they were sufficient to knock some of the momentum from a much stronger Tuesday gain. The market’s retrenchment on the day also highlight volatile trade that has played out in the final hour of trade over the past few sessions.
Which companies are on the move?
Office Depot Inc.shares climbed 8% in off-hours after the office supplies retailer’s earnings blew past estimates for the first quarter.
late Tuesday reported fiscal second-quarter profit of $460 million, or 26 cents a share, on sales of $18.01 billion, up from $14.9 billion in the year-ago quarter, but closures of its theme parks cost the media giant more than $1 billion in profit.
How are other markets trading?
Improving sentiment in global equity markets weighed on trading for government paper. The 10-year Treasury note yield
rose 2.4 basis points to 0.681%. Bond prices move in the opposite direction of yields.