Stocks Lack Direction at Open, Crude Oil Drops

Barry Adams
31 Aug, 2022
New York City

Stocks attempted a rebound in the early trading after a three-day sell-off and a concerted campaign from the central bankers and policymakers. 

Private sector payrolls increased 132,000 in August after expanding 270,000 in July, the latest ADP survey data released Wednesday. 

Economists are also awaiting the release of the non-farm payroll data on Friday from the Bureau of the Labor Statistics. 

The non-farm payrolls are expected to show an increase between 310,000 and 370,000 in August, according to five economists surveyed by Ticker.com. 

Total mortgage applications volume fell 3.7% in the last week from the previous week, the Mortgage Bankers Association reported Wednesday. 

The seasonally adjusted index declined after mortgage rates on 30-year fixed-rate mortgage for 20% down payment increased to 5.80% from 5.65% in the previous week. 

The average mortgage rate was 3.11% a year ago. 

Futures of crude oil prices declined $2.63 to $89.01 a barrel and natural gas eased 5 cents to $8.97 a thermal unit. 

The yield on 10-year Treasury notes rose to 3.14% and 2-year notes increased to 3.47, record high since 2007.   

Stocks attempted a rebound in the pre-market trading and sentiment was weak ahead of the employment data on Friday. 

Bed Bath & Beyond Inc plunged 24.3% to $9.19 after the company  announced a business and financial restructuring plan. 

The struggling retailer said it plans to close "low performing" 150 stores, eliminate 20% of its corporate and supply chain staff, bringing back merchandise from national brands. 

The retailer also said it "may offer or sell shares" without disclosing the amount, in a regulatory filing with the SEC.  

The retailer also said same store sales are down 26% in the current fiscal quarter ending on August 27. 

Snap Inc rose 55 cents to $10.58 after the operator of the messaging platform said it plans to cut its operating costs and reduce its workforce by 20%. 

The company also plans to stop working on several projects and tools development including its Pixy drone, mapping tool, online games and music library feature. 

Chewy Inc declined 6.2% to $35.25 after the online pet products retailer reported an unexpected profit but lowered its annual outlook. The company said higher prices are forcing consumers to limit purchases to basic products and medicines. 

 HP Inc declined 3.5% to $30.10 after the company reported mixed quarterly results and the company said electronics spending by enterprises and consumers is slowing down. 

European markets traded lower on rate hike worries and the impact of higher on the broader economy in the currency zone. 

Euro zone inflation rose to a record high in August as elevated energy prices spread wide and deep in the broader economy. 

Consumer prices inflation accelerated to 9.1% in August from 8.9% in July, the statistics agency of the currency zone eurostat reported Wednesday. 

Core inflation, excluding energy, food, alcohol and tobacco prices, increased to 4.3% in August from 4.0% in July.

The DAX index edged down 7.7 points to 12,946.29, the CAC-40 index declined 31.86 to 6,178.36, and the FTSE 100 index 90.49 to 7,271.80.