US markets have moved into consolidation mode after a bright opening, as investors mull a slew of economic indicators.
"US markets spiked higher today following a somewhat limp ADP payrolls and unit labour cost numbers out of the US. Tumbling unit labour costs show that employees’ wages are failing to keep up with improvements in the economy, rising productivity and inflation. This will no doubt be perceived as an issue by Janet Yellen and co," suggested Joshua Mahony at spread betting firm IG Index.
"We are certainly still in a place where bad news is seen as good news owing to the impact it has upon rate hike expectations," he added.
US productivity rose at an annualised 3.3%, versus an initial estimate of a 1.3% gain, making it the best growth rate since the end of 2013.
Meanwhile, private sector payrolls rose by 190,000 in August, according to Automatic Data Processing. In the previous month, there had been 177,000 new jobs created in the private sector.
"The ADP survey may not be considered the most accurate gauge of what Friday's US jobs report will show us, but it is certainly something the Fed will be watching," Mahony opined.
Analysts are expecting non-farm payrolls to show a rise of 213,000 jobs last month, close to the 215,000 seen in July.
A figure around that mark might prompt the Fed to raise interest rates at their meeting on September 17,
"The ADP report found that job creation grew less than expected, while last month's figure also saw a strong downward revision. The report had something for everyone, with job growth continuing to rise, yet at a significantly slower rate than anticipated," Mahony said.
In lunchtime trading, the Dow Jones industrial average was up 160 at 16,218, the S&P 500 was up 12 at 1,926 and the Nasdaq Composite was 36 points heavier at 4,672.
Computer chip giant Intel (NASDAQ:INTL), up 2.4% at US$28.48, was wanted after it introduced the 6th Generation Intel Core processor family, based on a design dubbed Skylake, after the market closed yesterday.
Also in demand was tax returns specialist H&R Block (NYSE:HRB) after it said it would offer to buy back up to US$1.5bn of its shares. The shares jumped 7.6% to US$35.44.
Telecoms giant AT&T (NYSE:T), meanwhile, was dismissive of an offer to its shareholders by TRC Capital to buy up to 3mln shares at US$31.30 a throw.
That offer is below the current price of US$32.65 (up 33 cents), and the board of AT&T urged shareholders to reject what it described as a "mini-tender".
Handbags seller Vera Bradley (NYSE:VRA) shot up US$2.59 to US$13.02 after better than expected results announced this morning, but discount retailer Dollar Tree (NASDAQ:DLTR) was friendless, down US$1.97 at US$67.73 after a disappointing trading update released after the bell yesterday.
Surgical devices maker Synergetics (NASDAQ:SURG) soared more than 50% to US$6.59 after an agreed US$6.50 a share cash offer from Canadian peer Valeant.
The offer could rise another dollar, depending on whether certain targets are met.