Stocks May Move Back To The Upside In Early Trading - U.S. Commentary

(RTTNews) - Following the sharp pullback seen in the previous session, stocks are likely to move back to the upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 52 points.

The upward momentum for the markets may be partly due to optimism that the Federal Reserve will delay its first interest rate hike due to the release of disappointing economic data.

Payroll processor ADP recently released a report showing that private sector employment increased by much less than expected in the month of April.

ADP said employment in the private sector increased by 169,000 jobs in April compared to a downwardly revised increase of 175,000 jobs in March.

Economists had expected private sector employment to climb by about 200,000 jobs compared to the addition of 189,000 jobs originally reported for the previous month.

The weaker than expected private sector data may lead to speculation that the more closely watched Labor Department may also show job growth below estimates on Friday.

The Labor Department released a separate report this morning showing that labor productivity fell in line with estimates in the first quarter of 2015.

The report said labor productivity fell by 1.9 percent in the first quarter following a 2.1 percent decrease in the fourth quarter. The continued drop in productivity matched economist estimates.

Meanwhile, the Labor Department said unit labor costs surged up by 5.0 percent in the first quarter after jumping by 4.2 percent in the fourth quarter. Economists had expected costs to increase by 4.5 percent.

Trading could also be impacted by reaction to remarks by Fed Chair Janet Yellen and International Monetary Fund Managing Director Christine Lagarde.

Yellen and Lagarde are scheduled to take part in panel discussion at the Institute for New Economic Thinking Conference on Finance and Society in Washington, D.C. at 9:15 a.m. ET.

Stocks moved sharply lover over the course of the trading session on Tuesday, more than offsetting the modest strength seen on Monday. The steep pullback reflected the volatility seen on Wall Street over the past several weeks.

The major averages ended the day firmly in negative territory. The Dow slid 142.20 points or 0.8 percent to 17,928.20, the Nasdaq plunged 77.60 points or 1.6 percent to 4,939.33 and the S&P 500 tumbled 25.03 points or 1.2 percent to 2,089.46.