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S&P 500 set for slightly lower open as private jobs data disappoints

  • US private payrolls rise less than expected in Feb.
  • UWM Holdings jumps in GameStop-style short squeeze.
  • Futures down: Dow and S&P 0.6%, Nasdaq 0.7%.
03 Mar 2021

The S&P 500 and the Nasdaq were set to open lower on Wednesday as disappointing private employment data for February dampened enthusiasm over a quick economic rebound fueled by a swift rollout of COVID-19 vaccines.

US private employers hired fewer workers than expected in February, suggesting the labor market was struggling to regain speed despite the nation's improving public health picture.

A more comprehensive monthly jobs report is due on Friday.

"The economy is still going through a bumpy road which is reflected through the back and forth nature of the markets as investors weigh on the jump in yields early this morning," said Scott Brown, chief economist at Raymond James in Florida.

The US 10-year Treasury yield ticked up to 1.46%, pressuring areas of the market with high valuations. It was still off last week's peak of above 1.61%.

High-flying Microsoft Corp, Apple Inc and Alphabet Inc dipped between 0.3% and 0.5% before the bell, while big US lenders Bank of America, Goldman Sachs and Morgan Stanley firmed about 1%.

Before the data hit, S&P futures rose as much as 0.8% as President Joe Biden said that the United States will have enough COVID-19 vaccine for every American adult by the end of May.

Texas also sweepingly rolled back coronavirus restrictions on Tuesday, lifting a mask mandate and saying most businesses may open at full capacity next week as many US states record a sharp decline in new infections and hospitalization.

"The market has gone back and forth over the past few sessions but the positive news of vaccines arriving a lot earlier than we expected is definitely helping investor sentiment," Brown said.

The US Senate is expected to take up Biden's $1.9 trillion coronavirus relief package on Wednesday, with Democrats aiming to get it signed into law before March 14, when some current jobless benefits expire. [nL2N2L03C1

At 8:57 a.m. ET, Dow E-minis were up 34 points, or 0.11% and S&P 500 E-minis were down 5.5 points, or 0.14%. Nasdaq 100 E-minis were down 53.5 points, or 0.41%.

Futures tracking the small-cap Russell 2000 added about 0.2%.

Investors have lately unwound positions in high-flying technology-focused stocks and moved into sectors that are likely to benefit from an economic recovery, including financials , energy and industrials.

Chevron Corp and Exxon Mobil Corp also advanced about 1% each as oil prices were boosted by expectations that OPEC+ producers might decide against increasing output when they meet this week.

Exxon Mobil Corp, ahead of a closely watched investor meeting, said it would grow its dividend and cut debt through 2025.

Shares in mortgage lender UWM Holdings Corp jumped about 25% as the new targets of a short-squeeze gain popularity on internet message boards.

ISM's survey, due later in the day, is expected to show US services industry activity remained at its highest level in nearly two years in February, unchanged from January.