By Geoffrey Smith
Investing.com -- U.S. stock markets opened mostly little lower again on Wednesday as a fresh slide in bonds again raised questions over assumptions as to companies' future profitability.
The yield on the 10-year U.S. Treasury bond rose some 5 basis points to 1.47% on nagging worries about heavy future supply, and concerns that a tightening of bank regulations will make it harder for the country's banks to hold the bonds coming on to the market.
By 9:40 AM ET (1440 GMT), the Dow Jones Industrial Average was up 33 points, or 0.1%, at 31,424 points, but the broader S&P 500 was down 0.3% and the Nasdaq Composite was down 0.6%.
The mood also darkened a little after ADP's private payroll survey for February showed a gain of only 117,000, some 60,000 short of forecasts. In mitigation, the previous month's number was revised up by over 20,000, however. The figures have been a poor guide to the official Labor Department's report on employment trends in recent months, but suggest that the labor market is still struggling to pick up momentum despite the lifting of Covid-19-related restrictions in many states in recent weeks. The official labor market report is due on Friday.
A further disappointment came with the Institute of Supply Management's non-manufacturing survey, whose main index fell to 55.3 instead of staying at 58.7 as expected. The ISM registered a drop in new orders and a rise in prices paid, adding further anecdotal evidence of incipient inflationary pressures. The Federal Reserve has indicated it is untroubled by what many analysts see as 'noisy' short-term data, and are more guided the ongoing evidence of labor market slack. As such, governor Lael Brainard said on Tuesday, it will be 'some time' before the Fed has to think about tapering its bond purchases, which are currently running at $120 billion a month.
Rocket Companies (NYSE:RKT) stock, which has the subject of a retail-driven short squeeze on Tuesday, was suspended, limit down, at the open and traded over 15% lower after the circuit-breakers lifted.
Among the gainers was crafts retailer Michaels (NASDAQ:MIK), which rose 23% after agreeing to be taken private by Apollo Global Management (NYSE:APO).
Alphabet (NASDAQ:GOOG) stock inched 0.6% lower after its Google (NASDAQ:GOOGL) unit said it would end ad sales based on individual users’ browsing histories, a move that again indicates the pressure on tech platforms to rein in some of the aggressive techniques that have made them so profitable in recent years.
Elsewhere, Exxon Mobil (NYSE:XOM) stock edged up 0.5% after the oil and gas major said it will keep its capital spending between $16-19 billion in 2021, and between $20-25 billion in the subsequent four years, keeping overall output flat over the period. The company appointed two activist investor representatives to its board on Monday after increasing pressure to shore up returns and account more realistically for the likely costs of climate change policies in the future.