LONDON (Alliance News) - US stocks are called to open in negative territory Wednesday, having closed firmly higher Tuesday, as investors take a step back ahead of a raft of US macro-economic data.
Wall Street shook off recent weaknesses to close higher Tuesday, with the DJIA closing up 0.5%, the S&P 500 closing up 0.8%, and the Nasdaq Composite closing up 0.9%.
These gains, however, are expected to be short-lived, with stock futures pointing to a slightly lower open Wednesday. The DJIA, Nasdaq Composite, and S&P 500 are all called to open down 0.2%.
"With the January US non-farm payroll figures due on Friday, Wednesday?s ADP private sector employment change release will be scrutinised for any insights," says Jonathan Thomas, senior economist at Lloyds Bank.
While Thomas expects the ADP to show a 192,000 increase in headcounts, consensus forecasts according to FXStreet.com are for a more modest addition of 180,000. The reading revealed an increase of 238,000 people in employment.
However, ?the number may fall on deaf ears regardless of the outcome after December?s report deviated from official payrolls data by a whopping 164,000," warns Ilya Spivak, currency analyst at DailyFX.
"The ISM figure may generate greater interest, but expectations for a pick-up in service-sector activity growth may be disappointed," he adds.
The Institute for Supply Management releases its non-manufacturing PMI report at 1500 GMT. The reading is expected to rise to 53.7 in January, up from December's 53.0 figure.
"Traditionally, the US non-manufacturing series is not seen as important as the manufacturing ISM, but the market will be looking for any indications that the surprise slump in the latter in January was an isolated case rather than representing a broader slowdown; a further downside surprise here would certainly suggest a further cold front for financial markets," says Rabobank analyst Michael Every.
Also in the US data calendar Wednesday, US Markit services PMI is released at 1358 GMT.
There is also a series of Fed-speakers throughout the day. Daniel Tarullo, member of the Board of Governors of the US Federal Reserve Board, speaks at 1500 GMT. Philadelphia Fed President Charles Plosser speaks at 1730 GMT, ahead of Atlanta Fed President Dennis Lockhart at 1840 GMT.
In corporate news, Time Warner Inc has released its fourth quarter results ahead of the New York bell. Earnings per share came in at USD1.17, beating estimates of USD1.15. The company also said it will look to begin a USD5 billion share buy-back programme. Shares in the stock are up 1.4% in pre-market trading.
Meanwhile, Twitter will report its first quarterly results since its 2013 IPO later in the day.
In the UK, stocks trade mixed. The FTSE 100 is currently up 0.3% at 6,470.07, the FTSE 250 is up 0.3% at 15,593.6, while the AIM All-Share is down 0.1% at 856.54.
In the main corporate event of the day, GlaxoSmithKline reported higher fourth quarter profits as new revenues increased and it cut costs. It also confirmed that it expects to launch late stage clinical trials on ten new drugs over the next two years.
The company reported a pretax profit of GBP2.55 billion for the three months to end-December, up from GBP1.73 billion a year earlier, with revenues rising to GBP6.91 billion, from GBP6.80 billion. For the full-year, pretax profit climbed to GBP6.65 billion, from GBP6.60 billion in 2012, as revenues rose to GBP26.51 billion, from GBP26.43 billion.
The results for both the fourth quarter and full-year were in line with analysts' forecasts.
Nevertheless, the pharmaceuticals major is up 2.4% at 1,590.50 pence, placing it amongst the biggest blue-chip riser.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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Glaxosmithkline (GSK)