With no major news events to guide trading, stocks are set for a slow start Wednesday morning. Forty-five minutes before the official start of trading in New York, stock index futures indicated that the Dow Jones Industrials ($INDU) could fall 25 or 30 points at the open. The NASDAQ ($COMPQ) is expected to open modestly lower as well.
Trading is expected to be cautious ahead of economic data due out over the next few days. The Fed's Beige Book, which offers a qualitative view of the economy, is due out this afternoon. Reports on consumer credit and weekly jobless claims are due out tomorrow morning.
This week's key piece of data is due out Friday, however, when the Labor Department releases its monthly payroll numbers for February. Today, data from ADP Employer Services showed the economy adding the fewest jobs since July 2003. According to the report, the US economy added 57,000 jobs last month. Economists were looking for an increase of 100,000.
Although ADP has missed the Labor Department's number by 78,000 jobs during the past six months, the weaker-than-expected report might rekindle concern that weakness in the housing sector is indeed spilling over to the broader economy. If so, trading might be somewhat guarded heading into Friday's key payroll data. Economists expect the Labor Department's report to show an increase of 110,000 jobs and the unemployment rate sitting unchanged at 4.6%,
In stock news Wednesday, Google (GOOG) is set to open higher after UBS upgraded the stock to "buy" from "neutral." CV Therapeutics (CVTX) is taking a hit after announcing that a medicine to treat chest pain failed to help patients with acute heart disease. Deutsche Bank downgraded the stock to "hold" from "buy" on the news and shares are trading down $3.00 to $9.30 a share. However, Avalon Pharmaceuticals (AVRX) is expected to gap higher after announcing a collaboration agreement with Merck (MRK). Take Two Interactive (TTWO) is also set to open higher on news SAC Capital, Oppenheimer, Tudor Investments and others have filed a SC 13D filing, which is expected to pave the way for new members on the company's board.
In other markets, crude oil is trading up 35 cents to $61.04 ahead of weekly inventory data due out at 10:30 a.m. Eastern time. Gold (April) is edging up $1.50 to $647.50 an ounce. In contrast to the action over the past week, trading in international markets is quiet. Japan's Nikkei fell 70 points to 16,746.62. Markets across Europe are mixed. US Treasurys are trading modestly higher following the disappointing ADP report. The benchmark ten year Treasury note is up 3 ticks. It's yield is now 4.52%
Yesterday, stocks snapped back from five days of selling and the major averages were able to post their best gains in months. The Dow surged 157 points and the NASDAQ added 44. However, today, the outlook is for cautious trading and investors will be looking to see if the bears resurface to trigger another wave of selling. But, with relatively uneventful trading in international markets and no real major news events to guide the market, it appears that the stage is set for a day of relatively quiet trading instead.
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