By Geoffrey Smith
Investing.com -- U.S. stock markets opened lower on Wednesday, but the main indices recovered from overnight lows after strong data from the labor market gave some reassurance that the economy still has momentum on the eve of a new policy tightening cycle from the Federal Reserve.
By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was down 184 points, or 0.5%, at 34,131 points, while the S&P 500 was also down 0.5% and the Nasdaq Composite was down 0.3%.
Futures for the main indices had all been down more than 1% before private payrolls processor ADP reported that a sharp pickup in hiring in the month through mid-September. ADP (NASDAQ:ADP) said 568,000 jobs were added by the private sector, up from 340,000 the previous month and well ahead of a consensus forecast of 428,000. Nearly 40% of the jobs added, some 226,000 in all, came in the leisure and hospitality sectors, suggesting that the sectors most exposed to the pandemic haven't stalled as a result of the Delta-variant wave of Covid-19 that swept the U.S. in the summer.
If corroborated by the government's official labor market report on Friday, the ADP's data should remove any remaining doubt that the Federal Reserve will start to reduce its bond purchases at it November meeting. They've been running at $120 billion a month since the start of the pandemic and have been a cardinal factor behind the explosion of stock prices in that time.
Facebook (NASDAQ:FB) stock continued to underperform, falling 1.9% in the wake of an embarrassing mass outage and even more embarrassing testimony from whistleblower Frances Haugen in Congress on Tuesday. CEO Mark Zuckerberg said in a post on Tuesday that the allegation that Facebook prioritized profit over the safety of its users "just isn't true."
Moderna (NASDAQ:MRNA) stock also continued to lose ground, falling 4.3% after Sweden said it would suspend the distribution of its Covid-19 vaccine to adults amid reports of links to heart muscle inflammation, or myocarditis.
Gainers included Coinbase Global (NASDAQ:COIN) stock, which rose 3.0% tracking the rally in Bitcoin, and Palantir Technologies (NYSE:PLTR), after the company announced a big order from the U.S. Army for its Gotham analytics platform. Palantir stock rose 4.3%.
Elsewhere, there were signs of froth coming off energy companies as natural gas prices reversed sharply in the wake of comments from Russian President Vladimir Putin. Natural Gas Futures fell 7.2% after Putin told a government meeting that Russia is ready to do more to stabilize world gas markets. Gas prices have hit 13-year highs this week as both European and Asian utilities have aggressively bid up the price of liquefied natural gas exports from the U.S. Shale gas drilller Chesapeake Energy (NYSE:CHK)'s (NASDAQ:CHK) stock fell 5.6%.