US stock futures pare losses after ADP payrolls; Middle East, Nike weigh

Investing.com -- U.S. stock futures pared losses Wednesday after stronger-than-expected employment data, although risk sentiment remains weak given the  escalated tensions in the Middle East as well as disappointing news from sportswear giant Nike .

By 08:35 ET (12:35 GMT), the Dow Futures contract was down 65 points, or 0.2%, S&P 500 Futures traded 15 points, or 0.3%, lower and Nasdaq 100 Futures dropped 22 points, or 0.1%. ADP employment rises more than expected

The ADP National Employment Report, released earlier Wednesday, indicated that U.S. private payrolls  increased more than expected in September, offering up more evidence that the country's labor market remains in a reasonably healthy state.

Private payrolls increased by 143,000 jobs last month after rising by an upwardly revised 103,000 in August.

This was above the increase of 120,000 positions forecast for last month after a previously reported gain of 99,000 in August.

The ADP report was published ahead of Friday's closely watched employment report for September from the Labor Department's Bureau of Labor Statistics, which is likely to guide market sentiment ahead of the next Federal Reserve meeting later this month. Middle East hits risk sentiment

The main indices remained in negative territory, however, after Iran launched a barrage of missiles at Israel late Tuesday as retaliation to Israeli strikes on Lebanon-based Hezbollah.

Israeli Prime Minister Benjamin Netanyahu promised a retaliation to Tehran's airstrikes, saying in a statement that Iran "made a big mistake" and "will pay for it."

The US has also said there will be "severe consequences" for Tehran's actions, with Defense Secretary Lloyd Austin adding that Washington is "well-postured" to defend its interests in the Middle East.

Although the situation has the potential to deteriorate further, UBS expects it will "stop short of an all-out war between Israel and Iran, including their respective allies." Nike withdraws forecast

Also weighing on risk appetite was disappointing news from Nike (NYSE:NKE ), after the US athletic apparel maker withdrew its full-year financial forecast and posted a 10% slump in quarterly revenue.

Its stock slumped over 8% premarket.

The results come as Nike undergoes an executive-level shake-up that will see boss John Donahoe replaced by company veteran Elliott Hill. Donahoe had overseen a period of weak performance fueled by stiff competition in the $150 billion a year global sneakers market.

Humana (NYSE:HUM ) stock fell 20% premarket after data showed that the proportion of the health insurer's membership enrolled in four-star Medicare plans and above for next year fell sharply. Crude soars on Middle East turmoil

Oil prices soared Wednesday as the escalating tensions in the Middle East raised concerns about a potential hit to output from that oil-rich region.

By 08:35 ET, the Brent contract climbed 2.5% to $75.38 per barrel, while U.S. crude futures (WTI) traded 2.8% higher at $71.79 per barrel. Both crude benchmarks surged more than 5% on Tuesday after Iran's attack on Israel.

Elsewhere, US crude inventories fell by about 1.46 million barrels for the week ended Sept. 27, compared with expectations of a decline of about 2.1M barrels, according to data from the American Petroleum Institute . 

The official government inventory report is set to be released later in the session.

 

 

Source: Investing.com