Wall Street slips as monthly private payrolls disappoint

(Reuters) – Wall Street fell on Wednesday, with the S&P 500 and the Nasdaq retreating from the record levels hit in the previous session as fewer-than-expected private job additions in November added to concerns about the near-term pressure on the economy.

FILE PHOTO: The U.S. flag is seen on a building on Wall St. in the financial district in New York, U.S., November 24, 2020. REUTERS/Brendan McDermid/File Photo

The biggest drag on the blue-chip Dow was a near 10% drop in Salesforce.com Inc after it agreed to buy workplace messaging app Slack Technologies Inc in a $27.7 billion deal as it bets on an extended run for remote working.

The private jobs data is the latest sign that soaring new infections and business restrictions were hampering the labor market’s recovery. The more crucial employment report is expected on Friday.

“It reminds investors that we do have some tough times ahead before we get to normal,” said Arian Vojdani, investment strategist at MV Financial in Bethesda, Maryland.

“But I don’t think this is signifying a protracted downturn. Markets continue to run based on the positive news we’ve seen on vaccines and how forward ahead the market is looking.”

Positive updates on coronavirus vaccine have helped investors raise bets on a swift economic rebound next year, powering the Wall Street’s main indexes to life-highs recently.

Pfizer Inc and BioNTech’s COVID-19 vaccine got the green light for use in Britain, the first Western country to approve a shot for COVID-19. Pfizer rose 3.3% and BioNTech added 6%.

A rotation into value stocks continued on Wednesday with financials and energy edging higher, while market leaders technology fell 0.8% and communication services dropped from a decade high.

At 09:48 a.m. ET, the Dow Jones Industrial Average fell 125.87 points, or 0.43%, to 29,698.05 and the S&P 500 lost 15.71 points, or 0.44%, to 3,646.36.

The Nasdaq Composite lost 130.30 points, or 1.08%, to 12,222.18, weighed down by a 6% slide in shares of soon-to-be an S&P 500 member Tesla Inc.

Meanwhile, market participants are closely tracking the progress in stimulus talks after a bipartisan group of U.S. senators and House of Representative members proposed a $908 billion relief bill on Tuesday.

Getting a generous stimulus package through Congress is a top priority, President-elect Joe Biden said in an interview with the New York Times. He also said he would not immediately cancel the Phase 1 trade deal that President Donald Trump struck with China.

Among other stocks, cloud data service provider NetApp’s shares jumped 7.5% after it forecast third-quarter profit above expectations.

Later in the day, investors will turn to the Federal Reserve’s Beige Book report, which will give a glimpse of the state of the economy based on conversations with business contacts.

Declining issues outnumbered advancers by a 1.5-to-1 on the NYSE and by a 2.3-to-1 on the Nasdaq.

The S&P 500 posted six new 52-week highs and no new low, while the Nasdaq recorded 28 new highs and four new lows.

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