Business - New York Stock futures rise after private hiring picks up

By Stephen Bernard

AP Business Writer

NEW YORK (AP) -- Stock futures rose slightly Wednesday after a reading on private employment showed a modest pickup in hiring.

Payroll company ADP said private employers slightly ramped up hiring in July. A report from the Institute for Supply Management is expected to show growth in the services sector slowed last month.

The data follows the trend seen over the past few months that the economy continues to expand, but at a sluggish pace. Economic reports over the past couple of days have begun to again overshadow quarterly earnings, which were mostly upbeat and drove stocks higher in July. Results that beat forecasts have largely been welcomed by investors in recent days because it provides reassurances that while a recovery might be slow, the economy isn't falling back into a second recession.

ADP said private employers added 42,000 jobs last month. That was slightly better than the 40,000 new hiring predicated by economists polled by Thomson Reuters. High unemployment remains the biggest obstacle to a stronger recovery.

People worried about their jobs have cut back on shopping and avoided big purchases like new homes, which has stifled growth across many sectors of the economy. Analysts have said the economy and the stock market could remain stagnant until there are consistent signs of significant job growth.

The ADP report is often used as a gauge for the Labor Department's monthly employment report. The government report, which is broader and includes government jobs as well as private sector employment, is due out Friday. It's expected to show private employers added 90,000 jobs last month and the unemployment rate rose to 9.6 percent from 9.5 percent in June.

The ISM's services index likely dipped to 53 in July from 53.8 a month earlier. Any reading above 50 indicates the sector is expanding, so while growth isn't as strong the sector continues to expand.

A slight slowdown in services activity would match the modest pullback seen Monday when ISM released its manufacturing survey. Stocks surged Monday after the ISM manufacturing index fell less than expected.

Ahead of the opening bell, Dow Jones industrial average futures rose 23, or 0.2 percent, to 10,617. Standard & Poor's 500 index futures rose 2.70, or 0.2 percent, to 1,121.00, while Nasdaq 100 index futures rose 3.50, or 0.2 percent, to 1,896.50.

Published: Thu, Aug 5, 2010