US Markets

US STOCKS-Wall St set to rise on growth stocks bounce, strong ADP data

Credit: REUTERS/Brendan McDermid

Wall Street's main indexes were set to open higher on Wednesday as megacap stocks bounced from a steep sell-off in the previous session, while a survey showed a solid rise in private jobs in April.

By Shreyashi Sanyal and Sruthi Shankar

May 5 (Reuters) - Wall Street's main indexes were set to open higher on Wednesday as megacap stocks bounced from a steep sell-off in the previous session, while a survey showed a solid rise in private jobs in April.

Technology-related companies including Apple Inc AAPL.O, Microsoft Corp MSFT.O, Amazon.com Inc AMZN.O, Facebook Inc FB.O, Tesla Inc TSLA.O and Alphabet Inc GOOGL.O rose between 0.4% and 1.3% in premarket trading.

Value stocks, that stand to benefit more from economic recovery, also gained, with oil major Chevron Corp CVX.N adding 1.1%, lender Goldman Sachs Group Inc GS.N up 0.3% and heavy machinery maker Caterpillar Inc CAT.N gaining 0.5%.

"The reopening optimism is back driving the markets today, with investors realizing that the sell-off yesterday was probably a bit overdone," said Fiona Cincotta, senior financial markets analyst at City Index in London.

The S&P 500 value index .IVX has risen 15.1% so far in the year, while its growth counterpart .IGX is up 7.1%.

A rally that pushed the S&P 500 .SPX and Nasdaq .IXIC indexes to record high last week has hit a snag as investors try to find the balance between improving economic data, strong earnings along with unprecedented fiscal stimulus and whether the Federal Reserve will hike interest rates.

U.S. Treasury Secretary Janet Yellen said on Tuesday she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as President Joe Biden's spending plans boost growth.

The initial comments made by Yellen deepened a sell-off in tech stocks on Tuesday, as investors worried higher rates would weigh on valuations of growth companies.

"I think there is the thought in the market that rate hike will be coming, but it's still not quite on the radar just yet. Powell has worked very hard to drum that message home," City Index's Cincotta said.

The ADP National Employment Report showed U.S. private payrolls increased in April as companies rushed to boost production amid a surge in demand, powered by massive government aid and rising vaccinations against COVID-19.

A more comprehensive reading in the form of the Labor Department's non-farm payrolls data is due Friday.

Also on the radar is the Institute for Supply Management's non-manufacturing purchasing managers' index, which is expected to show a slight rise in April from March.

At 8:33 a.m. ET, Dow e-minis 1YMcv1 were up 75 points, or 0.22%, S&P 500 e-minis EScv1 were up 15.75 points, or 0.38%, and Nasdaq 100 e-minis NQcv1 were up 79 points, or 0.58%.

Ride-hailing company Lyft Inc LYFT.O rose 4.6% after it surprised Wall Street with significantly lower losses than expected.

Rival Uber Technologies Inc UBER.N is set to report earnings after markets close on Wednesday.

T-Mobile US Inc TMUS.O gained 2% as it raised its full-year postpaid subscriber net additions forecast.

(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))

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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