*
U.S. private payrolls in March miss estimates
*
FedEx up, company to consolidate operating divisions
*
Indexes mixed: Dow up 0.17%, S&P down 0.15%, Nasdaq down
0.51%
(Updates to market open)
By Ankika Biswas and Amruta Khandekar
April 5 (Reuters) - The S&P 500 and the Nasdaq slipped
on Wednesday as weaker-than-expected private payrolls data for
March deepened worries that the rapid interest rate hikes by the
Federal Reserve may tip the U.S. economy into a recession.
The ADP National Employment report showed U.S. private
employment rose by 145,000 jobs last month, compared with
economists' projections of an increase of 200,000 jobs, adding
to recent signs of a cooling economy.
With growing concerns about a worsening economic outlook
following the recent turmoil in the banking sector, market
expectations have shifted in favor of the U.S. central bank
hitting the brakes on its interest rate hikes.
Traders' bets of a pause by the Fed in May shot up to 60.8%,
while odds of a 25-basis point interest rate hike fell to 39.2%,
according to CME Group's Fedwatch tool.
Major technology and growth stocks such as Meta Platforms
Inc , Tesla Inc and Amazon.com Inc slipped between 0.3% and 1.4% in early trade.
Nvidia Corp was among top drags on the S&P 500,
down 2.2%, after Alphabet Inc's Google said the
supercomputers it uses to train its artificial intelligence
models were faster and more power-efficient than comparable
systems from the chipmaker.
Defensive stocks such as healthcare , utilities and consumer staples were in the green among
major S&P 500 sectors.
Keeping the Dow Jones afloat was a 3.2% gain in Johnson &
Johnson after the company's $8.9-billion offer to settle
talc-related lawsuits gained support of thousands of claimants,
easing an overhang on its plans to list consumer health unit
Kenvue.
All eyes are now on the non-farm payrolls data for March, a
more comprehensive employment report, that is due on Friday for
further clues on the state of the labor market.
"The Street is realizing that with slower ADP payrolls ...
and the possibility that we get an undercut in Friday's payroll
numbers, the economy is indeed slowing and the Fed will only
need to make one more rate hike, if any," said Sam Stovall,
chief investment strategist of CFRA Research in New York.
"But at the same time, I think investors are closely
watching to make sure that we don't fall into a deep recession."
A report on non-manufacturing activity in March from the
Institute for Supply Management is expected later on Wednesday.
At 9:38 a.m. ET, the Dow Jones Industrial Average was
up 57.17 points, or 0.17%, at 33,459.55, the S&P 500 was
down 6.16 points, or 0.15%, at 4,094.44, and the Nasdaq
Composite was down 61.98 points, or 0.51%, at 12,064.35.
Both the benchmark S&P 500 and the tech-heavy Nasdaq are now on track for their first weekly declines in four in the
holiday-shortened week.
FedEx Corp rose 3.6% as the freight bellwether firm
said it will fold its operating divisions into one organization
as it steps up efforts to cut costs and increase efficiency.
Declining issues outnumbered advancers for a 2.10-to-1 ratio
on the NYSE and a 2.02-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and one new
low, while the Nasdaq recorded 17 new highs and 85 new lows.
(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru;
Editing by Nivedita Bhattacharjee and Shounak Dasgupta)
