US stocks close lower on jobs miss, slowing-growth fears

4:05pm: US equities end lower on jobs miss US stocks closed lower after a private-sector jobs report came in lower than expected. The ADP private payroll survey showed a gain of 330,000 jobs for July, well short of the consensus estimate of 653,000. On the day, the Dow fell 323 points, or 0.92%, to 34,792. The S&P 500 declined 0.46% to 4,402 but the tech-heavy Nasdaq managed a 0.13% increase to 14,780.  1:00pm: Strong earnings eclipsed by jobs data Corporate earnings from US companies continue to beat Wall Street estimates, but stocks declined with investors weighing concerns over the economic impact of the ongoing pandemic and weak jobs data. In afternoon trading, the Dow Jones Industrial Average was down 260 points or 0.7% at 34,855, although the Nasdaq Composite held onto meagre gains. Meanwhile, the benchmark S&P 500 fell 0.3% in lackluster trading. After six straight months of gains, the S&P 500 has struggled to rise higher in August as surging cases of the Delta variant of the coronavirus, fears of higher inflation and now weak jobs data have eclipsed a stellar corporate earnings season. Shares of ride-hailing company Lyft shot up after it unexpectedly delivered adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization profitability for the first time since going public in 2019. The company said it saw a brisk pick-up in ridership during the reopening of the economy. 10.45am: Jobs worry overshadow stocks As expected, the main indices on Wall Street opened in negative territory on Wednesday after a much lower than expected ADP jobs report rattled traders. After an hour and a quarter of trading, the Dow Jones Industrial Average was down 179 points or 0.5% at 34,937, while the S&P 500 fell 0.3%, although the Nasdaq Composite edged up 0.04%. The latest ADP jobs report showed the US private sector massively undershot forecasts for hiring in July, adding around 330,000 jobs during the month compared to forecasts of a 695,000 rise. The figure for June was also revised down to 680,000 jobs added compared to the initial figure of 692,000 reported initially. The biggest increase came from the leisure and hospitality sector, which added 139,000 jobs during the month, while the information sector was the worst-performing, losing 1,000 jobs. The sluggish pace of hiring may worry many who are hoping the US economy can fill a record 9.2mln job openings across the country, however other factors such as a lack of raw materials may also stymie production in some sectors. The much lower than expected figure will also raise concerns about the July non-farm payroll figure on Friday, which will now be thrown into doubt and increase pessimism about the prospects for the US economic recovery from the pandemic. The Nasdaq index managed to stay positive, however, as retail trading platform Robinhood Markets Inc (NASDAQ:HOOD) soared 38% higher to US$64.50 in mid-morning deals as the stock seemed to have been captured by the same ‘memestock’ mania that helped boost the likes of GameStop Corp (NYSE:GME) and AMC Entertainment Holdings (NYSE:AMC) Inc earlier this year. The surge may be particularly welcome for Robinhood following its lacklustre IPO last week, which saw the shares list at US$38 each only to see them close 8.4% lower on the first day of deals. However, today’s spurt means the stock is now changing hands at a 70% premium to its IPO price. The performance may also leave some analysts, who at the outset deemed that retail traders had turned sour on Robinhood, looking a little red-faced. 7.45am: Dow, S&P seen lower, Nasdaq higher US markets are expected to make a mixed start on Wednesday as traders await the ADP private-sector jobs data ahead of the all-important non-farm payrolls on Friday. Spread-betters are predicting the Dow Jones Industrial Average will open around 53 points lower, while the S&P 500 is expected to shed 4.5 points. The Nasdaq Composite, however, is predicted to be the positive outlier with a gain of 9 points. The ADP report is expected to show that the US private sector added around 700,000 new jobs in July, around the same as the previous month, although some analysts have cautioned the actual figure could be widely different. “The latest US jobs data will give an indication on how fast the US labour market is progressing towards the Fed’s policy goal, and how close we are to the ‘substantial’ progress that the Fed pursues to trigger the most-apprehended tapering of its massive bond buying program,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “A read below 500,000 should throw the mood off the cliff, as there is not much to awaken the Fed doves with inflation hovering above the 5% mark. A strong read, on the other hand, should accelerate the thinking that the Fed will get to the tapering stage quicker than otherwise. That could apply a certain pressure on the US stocks, but it’s always better to walk towards an inevitable policy tightening with a set of strong economic data than the contrary,” she added. Meanwhile, traders will likely be keeping an eye on shares in CVS Health Corp (NYSE:CVS) after the pharmacy chain reported second-quarter earnings that beat estimates while also raising its forward guidance. And troubled synthetic biology firm Zymergen will also be in focus after the group warned revenue is expected to be immaterial in 2022 and that its CEO will be stepping down. The stock has already plunged 73% to US$9.34 in pre-market deals. Five other things to watch on Wednesday: General Motors Co. swung to a second-quarter profit from a loss last year when the coronavirus (COVID-19) pandemic shut operations and raised its full-year forecast despite an $800 million hit from the recalls of the Chevrolet Bolt electric vehicle. Japanese car manufacturer Toyota Motor (NYSE:TM) Corp posted record quarterly earnings and rival Honda Motor (NYSE:HMC) Co raised its annual profit forecast as post-lockdown sales surge, but the pair joined other automakers in warning that the global chip shortage would persist. Kraft Heinz Co (NASDAQ:KHC). beat market estimates for quarterly net sales and profit as demand for snacks and packaged meals remained strong even as people started venturing out following the easing of coronavirus restrictions. The New York Times Co, reported better-than-expected quarterly revenue driven by strong advertising demand and a rise in digital subscriptions. Sony (NYSE:SNE) Corp raised its earnings outlook after a record first-quarter operating profit helped by pandemic stay-at-home demand for PlayStation 5 consoles, TVs, music and movies.