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U.S. Stocks Pull Back From All-Time Highs; ADP, ISM Services Data Miss Mark

U.S. stocks are experiencing selling pressure after yet another record run up yesterday for the Dow and S&P 500. Futures turned mixed prior to the open after the government issued its monthly ADP report showing the economy added 158,000 private-sector jobs in March, well below the 205,000 consensus forecast by economists. In addition, the ISM services Index reading slightly missed the mark, adding to the negative tone. As a result, buyers have taken a well-deserved breather this morning.

While the ADP reading was a disappointment, it usually doesn't have as much of an impact as the official Labor Department payroll data, because on a month-to-month basis the ADP can vary significantly compared to the official government figures. On a longer-term basis; however, the correlation is stronger. The official government employment figures are on tap for this Friday.

The ISM services number came in at 54.4, down from 56.0 in the prior month and contrasted to consensus forecasts for a more modest pull back to 55.5. The reading was the lowest since August, mirroring Monday's lower-than-expected ISM manufacturing data. Despite the downtrend in March, the U.S. economy is still showing slow growth. Market participants, however, may begin to fret that a downtrend is in place, which could put a damper on the current bull run in equities.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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