Stocks May Show A Lack Of Direction In Early Trading - U.S. Commentary

(RTTNews) - After moving mostly higher over the course of the previous session, stocks may show a lack of direction in early trading on Wednesday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 1 point.

Uncertainty about near-term outlook for the markets may contribute to choppy trading on Wall Street following the release of ADP's report on private sector employment.

While the report showed another notable increase in private sector employment in the month of November, the pace of job growth in the sector fell short of economist estimates.

ADP said private sector employment rose by 208,000 jobs in November, but economists had been expecting an increase of about 225,000 jobs.

Paul Dales, Senior U.S. Economist at Capital Economics, said, "Stepping back a bit from November's data, arguably more important is that both the ADP and official measure of payrolls have risen by more than 200,000 in at least seven of the past eight months."

"We see no reason why that can't continue, thereby forcing the unemployment rate lower and putting more pressure on the Fed to raise interest rates earlier rather than later," he added.

A separate report released by the Labor Department showed that labor productivity rose by more than previously estimated in the third quarter, although the revised increase still came in below expectations.

Not long after the open, the Institute for Supply Management is scheduled to release a separate report on activity in the U.S. service sector in the month of November.

Economists expected the ISM's non-manufacturing index to inch up to 57.5 in November after slipping to 57.1 in October.

The Federal Reserve is also scheduled to release its Beige Book report later in the day. The report provides anecdotal evidence on economic conditions in the 12 Fed districts.

Stocks moved mostly higher over the course of the trading day on Tuesday, as traders reacted to a number of positive catalysts. The gains on the day partly offset the weakness seen on Monday, with the Dow reaching a new record closing high.

The major averages all ended the day firmly in positive territory. The Dow climbed 102.75 points or 0.6 percent to 17,879.55, the Nasdaq rose 28.46 points or 0.6 percent to 4,755.81 and the S&P 500 advanced 13.11 points or 0.6 percent to 2,066.55.