Stocks Nearly Flat In Early Trading Despite Upbeat Jobs Data - U.S. Commentary

(RTTNews) - While stocks initially moved higher on Wednesday on the heels of upbeat jobs data, buying interest has waned since the open. The major averages have subsequently shown a lack of direction, lingering near the unchanged line.

Currently, the major averages are posting modest gains. The Dow is up 8.03 points or 0.1 percent at 16,964.10, the Nasdaq is up 3.19 points or 0.1 percent at 4,461.84 and the S&P 500 is up 0.44 points or less than a tenth of a percent at 1,973.76.

The initial strength on Wall Street came following the release of a report from payroll processor ADP showing that private sector employment in the U.S. increased by much more than anticipated in the month of June.

ADP said employment in the private sector surged up by 281,000 jobs in June following an increase of 179,000 jobs in May. Economists had been expecting employment to climb by about 205,000 jobs.

The substantial private sector job growth in June reflected the biggest monthly increase in employment since November of 2012.

Mark Zandi, chief economist of Moody's Analytics, said, "Judging from the job market, the economic recovery remains fully intact and is gaining momentum."

While the data generated some optimism about the Labor Department's monthly jobs report, traders seem reluctant to make any significant moves ahead of the release of the report on Thursday.

The Labor Department report includes both public and private sector jobs and is currently expected to show an increase of about 210,000 jobs.

A separate report from the Commerce Department showing a bigger than expected drop in factory orders may also have helped to offset the early buying interest.

Gold and steel stocks are seeing some strength in early trading, although weakness among airline and utilities stocks has helped to limit the upside for the markets.

In overseas trading, stock markets across the Asia-Pacific region moved to the upside during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index surged up by 1.6 percent.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index has fallen by 0.4 percent, the German DAX Index is just above the unchanged line and the U.K.'s FTSE 100 Index is up by 0.2 percent.

In the bond market, treasuries are extending yesterday's pullback on the heels of the upbeat jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.6 basis points at 2.599 percent.