Futures Gain After ADP Employment Report
Futures rose Wednesday, following a massive selloff in the previous session, after a reading on private sector employment came in stronger than expected.
Stocks sold off sharply Tuesday with the Dow down for an eighth day and the S&P turning negative for the year amid economic worries and even after President Obama signed a bill to avoid a debt default.
While both Moody's and Fitch confirmed their AAA-rating on the U.S., threats of future downgrades still remain as both rating agencies warned additional deficit-reduction measures are needed for the government to put its finances in order and retain the rating.
Several told CNBC that the deal simply "kicked the can down the road," and that at best the issue would be raised before the end of the year.
On the economic front, U.S. private employers added 114,000 jobs in July, topping economists' expectations, according to the ADP National Employment Report. Economists had expected the report to show a gain of 100,000 jobs, according to a Reuters poll.
Meanwhile, an unexpected increase in private sector job cuts in July helped push the number of announced U.S. job cuts to a 16-month high of 66,414 in July, according to a report from Challenger, Gray & Christmas.
The data come ahead of Friday's closely watched government jobs report, which is expected to show 85,000 nonfarm payrolls and a 9.2 percent unemployment rate.
Bank of America told state and federal officials that it wants protection against future litigation relating to mortgage servicing and is willing to reduce the amount owed by some of its troubled borrowers in exchange, according to the Wall Street Journal.
Among earnings, Comcast edged up after the parent company of CNBC posted higher earnings. Rival Time Warner also
MasterCard rose after the credit-card provider reported a better-than-expected profit as the firm processed more card transactions and revenue increased.
However, Garmin slumped after the GPS manufacturer posted a lower-than-expected profit.
Activision is due to report after the close.
On the economic front, weekly mortgage applications gained last week as interest rates fell, according to the Mortgage Bankers Association.
Factory orders for June due out at 10:00am ET are expected to show a decline of 1 percent, following May's increase of 0.8 percent. And the Institute For Supply Management will be out with its monthly non-manufacturing index, measuring the health of the services sector. The index is seen coming in at 53.5 for July, compared to 53.3 in June.
European shares continued to fallas Italy held crisis talks with officials from the European Union. Yields on Italian and Spanish bonds hit record highs on Tuesday as investors began to worry that the European Financial Stability Fund (EFSF) would fail to cope with a default by either country.
Coming Up This Week:
WEDNESDAY: Factory orders, ISM non-mfg index, oil inventories
THURSDAY: Weekly jobless claims, money supply, chain-store sales; Earnings from GM, AIG, Kraft, Sunoco
FRIDAY: Employment situation, consumer credit; Earnings from P&G
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