*
U.S. private payrolls miss estimates in March
*
FedEx up, company to consolidate operating divisions
*
Futures down: Dow 0.04%, S&P 0.12%, Nasdaq 0.03%
(Updates prices throughout; adds details, comments)
By Ankika Biswas and Amruta Khandekar
April 5 (Reuters) - Wall Street's main indexes were set
for a subdued open 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 labor market.
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.
"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."
Traders' bets of a pause by the Fed in May shot up to 62.2%,
while odds of a 25-basis point interest rate hike fell to 37.8%,
according to CME Group's Fedwatch tool.
As U.S. Treasury yields dropped after the data, major
technology and growth stocks such as Meta Platforms Inc , Tesla Inc and Amazon.com Inc eked
out gains in premarket trade.
All eyes are now on the non-farm payrolls data for March, a
more comprehensive employment report, that is due on Friday for
more conclusive clues on the state of the labor market.
Final data on the S&P Global Composite and Services PMI and
a report on non-manufacturing activity in March from the
Institute for Supply Management, due after the opening bell, are
also in focus.
At 8:27 a.m. ET, Dow e-minis were down 12 points,
or 0.04%, S&P 500 e-minis were down 4.75 points, or
0.12%, and Nasdaq 100 e-minis were down 4 points, or
0.03%.
Both the benchmark S&P 500 and the tech-heavy Nasdaq are now on track to notch their first weekly declines in four in
the holiday-shortened week.
Wall Street's main indexes ended lower in the previous
session, with the benchmark S&P 500 snapping a four-day
winning streak after a fall in U.S. job openings and factory
orders.
Among stocks, Nvidia Corp fell 1.7% in premarket
trade 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. Alphabet's shares were up 1.5%.
Albemarle Corp shed 3.2% after BofA Global Research
downgraded the world's largest lithium producer's stock to
"underperform".
Johnson & Johnson gained 2.6% as 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.
FedEx Corp rose 2.8% 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.
(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru;
Editing by Nivedita Bhattacharjee and Shounak Dasgupta)
