NEW YORK, Aug 5 – US stocks traded lower Wednesday after a survey showed the US private sector shed more jobs than expected in July.
The Dow Jones Industrial Average was down 25.92 points (0.28 percent) to 9,294.27 in opening trades a day after a modest rise in shares kept a three-week uptrend intact and pushed the main indexes to fresh 2009 highs.
The Nasdaq composite lost 0.25 points (0.01 percent) to 2,011.06 while the broad-market Standard & Poor\’s 500 shed 1.09 points (0.11 percent) to 1,004.56.
A survey by payrolls firm ADP showed Wednesday that the private sector shed 371,000 jobs in July, sharply lower than the preceding month but more than expected amid a severe and long recession.
The number of private nonfarm jobs that vanished last month exceeded the 350,000 forecast by most analysts.
"The initial reaction to the report from ADP that nonfarm private employment decreased 371,000 from June to July was negative as the headline number was slightly worse than the consensus estimate of 350,000," said Briefing.com analyst Patrick O\’Hare.
The Labor Department is to publish the July jobs data on Friday. Most analysts expect the unemployment rate climbed to 9.6 percent from 9.5 percent in June, a 26-year high, amid a painful recession that began in December 2007.
They also anticipate that the economy shed 328,000 jobs from nonfarm payrolls.
The ADP report of a bigger-than-expected July fall in private sector jobs was "adding some uneasiness among (equity) traders ahead of Friday\’s labor report," said Charles Schwab & Co. analysts in a client note.
The analysts said that the ADP report "has not been a reliable gauge of the labor report, although adjustments have been made recently."