Stock Futures Still Weak After ADP Report
NEW YORK ( TheStreet) -- U.S. stock futures continued to point to a weak open on Wall Street Wednesday with an in-line report on job creation in the private sector doing little to sway sentiment.
Futures for the Dow Jones Industrial Average were slipping 97 points, or 99.6 points below fair value, at 13,035. Futures for the S&P 500 were off 10.7 points, or 10.5 points below fair value, at 1398. Futures for the Nasdaq were retreating 17.3 points, or 17.3 points below fair value, at 2762.
U.S. stocks fell Tuesday after the Federal Reserve downplayed the prospects for more quantitative easing. Tuesday's Fed minutes struck a measured tone about the prospect of more bond buying with the central bank saying it was "prepared to adjust the size and composition of its securities holdings as appropriate to promote a stronger economic recovery in a context of price stability."
Spain's disappointing debt auction on Wednesday was a reminder that the country could be next in line in seeking a big bailout as global investors showed they were not yet prepared to hold Spanish debt without a higher risk premium.
The auction for three-, four-, and eight-year bonds raised €2.6 billion, coming in at the lower end of the €2.5 billion to €3.5 billion range targeted. Shortly after the sale, Spain's 10-year benchmark bond yield rose to 5.6% from 5.45% Tuesday. Italian yields were rising in sympathy while the euro-dollar was driven to fresh lows at $1.31 on the auction results.
London's FTSE was losing 1.1% despite a much better-than-expected March services purchasing managers index reading of 55.3. Germany's DAX was retracting by 1.7%. In Asia, Japan's Nikkei Average dropped 2.3% and Hong Kong's Hang Seng index finished up 1.3%.
In U.S. news, the Automatic Data Processing employment change report indicated that private sector employment rose 209,000 in March, roughly in line with market expectations but down from an upwardly revised by 14,000 to 230,000 in February. The report is a precursor to Friday's nonfarm payrolls data from the federal government. Economists expect 200,000 private-sector jobs were added in March.
Employment in the private, service-providing sector increased 164,000 in March, after rising a revised 183,000 in February. Employment in the private, goods-producing sector rose 45,000 in March. The manufacturing sector added 23,000 jobs.
Also on the U.S. economic calendar Wednesday is the Institute for Supply Management's services index for March at 10 am ET.
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In corporate news, General Electric's (GE) credit rating was downgraded a notch by Moody's because the agency said it sees risks associated with the funding model of GE's lending unit, General Electric Capital Corp.