U.S. stocks open lower on ADP miss, eyes on Fed; Dow falls 0.4%

Investing.com - U.S. stock markets were lower after the open on Wednesday, after data showed that the U.S. private sector added fewer-than-expected jobs in April, underlining concerns over the fragile U.S. economic recovery.

Investors now awaited the outcome of the Federal Reserve’s policy meeting later in the session for further cues on the direction of its monetary policy.

During early U.S. trade, the Dow Jones Industrial Average fell 0.25%, the S&P 500 index edged down 0.13%, while the Nasdaq Composite index added 0.13%.

Payroll processing firm ADP said in a report earlier that non-farm private employment rose by a seasonally adjusted 119,000 in April, below expectations for an increase of 150,000.

The previous month’s figure was revised down to a gain of 131,000 from a previously reported increase of 158,000.

Market players now looked ahead to the outcome of the Federal Reserve’s two-day policy meeting, as investors try to assess the central bank's attitude towards monetary stimulus.

Recent economic data has dampened expectations for an earlier than expected end to the central bank’s asset purchase program after recent Fed minutes showed that policymakers are divided over the benefits of ongoing monetary easing.

Data on Tuesday showed that the Chicago purchasing managers’ index dropped 49.0 in April from 52.4 in March, the lowest level since September 2009.

The dismal data came after a report last week showed that the U.S. economy grew 2.5% in the first quarter, falling short of expectations for 3.0% growth, underlining concerns over the outlook for the economic recovery.

In earnings news, MasterCard saw shares fall 2.5% after the credit card company posted first quarter revenue of USD1.91 billion, missing estimates for sales of USD1.93 billion.

Pharmaceutical giant Merck saw shares drop 4.3% after saying first quarter revenue totaled USD11.1 billion, below expectations for sales of USD11.7 billion. The downbeat earnings prompted the company to lower its full-year earnings outlook.

The company also announced a stock buy-back plan amounting to USD15 billion.

Also in earnings news, Cable television provider Comcast saw shares gain 1.7% after reporting first quarter earnings per share of USD0.54, above expectations for earnings per share of USD0.51. However, revenue figures came in below estimates.

Social media company Facebook saw shares dip 0.5%, as investors readjusted positions ahead of the company’s earnings report due later in the day.

Across the Atlantic, London’s FTSE 100 edged 0.4% higher in quiet trade. Trade volumes were expected to remain thin, with many markets in Europe closed for the Labor Day holiday.

During the Asian trading session, Australia’s ASX/200 Index ended down 0.5%, while Japan’s Nikkei 225 Index closed 0.4% lower, following the release of disappointing Chinese manufacturing data.

The state-affiliated China Federation of Logistics and Purchasing said that its manufacturing activity index fell to 50.6 in April from March’s reading of 50.9.