US Open: Stocks open lower amid strong private sector hiring data
US markets opened lower on Wednesday, amid increasing geopolitical tension in Ukraine and signs of economic weakness in Europe.
German manufacturing activity fell while Italy cut its growth forecast, as factory prices in the Eurozone fell by the most in over 12 months in September.
Meanwhile, stronger-than-expected data on private sector hiring sparked concerns that the Federal Reserve may hike its interest rates sooner than anticipated, after private employers added 213,000 new jobs in September.
The rise marked the sixth consecutive month job gains had risen above the 200,000 unit threshold.
According to data released by the US Commerce Department on Wednesday, outlays for US construction projects fell 0.8% in August to a seasonally adjusted annual rate of $961bn, exceeding the 0.5% forecast.
Meanwhile, manufacturing slowed down in September, following the strongest rate of growth in three years as US factories settled into a more sustainable rate of expansion.
“The manufacturing outlook looks pretty good,” Thomas Simons, a market economist at Jefferies LLC, was quoted as saying by Bloomberg. “Auto demand seems to be accelerating and that supports the idea that production will continue to chug along. The third quarter is looking pretty solid.”
In corporate news, Tekmira Pharmaceuticals soared after the first known Ebola case diagnosed in the US was confirmed by the Center for Disease Control and Prevention late on Tuesday.
Biocryst Pharmaceuticals and Sarepta Therapeutics, both of which are working on treatments for the virus, also moved up in early trading, while Vivint Solar rallied following its initial public offering.
The 10-year Treasury note yield fell as much as 5.5 basis points early on Wednesday, while the 30-year bond yield dropped four basis points and the five-year note fell 0.05 to 1.71%.
The dollar was in retreat against the pound and yen, tapping the 110-yen level for the first time in six years but rose marginally against the euro, while West Texas intermediate crude rebounded 1% and was trading at just $92.1 a barrel.