U.S. stocks are extending a recent climb and the S&P 500 continues to notch unchartered territory in a shortened session ahead of tomorrow’s Independence Day holiday break, with U.S.-China trade tensions remaining in check and economic data relatively solid. Eurozone services sector growth was revised higher and U.S. output from the sector, although decelerating, remained comfortably in expansion territory. Treasury yields are down and the U.S. dollar is little changed, though crude oil and gold prices are higher. Tesla is rising after announcing record high quarterly deliveries and Symantec is gaining on reports Broadcom is in talks to acquire the cybersecurity company, though Canopy Growth is falling after it ousted its co-CEO Bruce Linton. Asia finished mixed and Europe is moving higher as some EU leadership uncertainty fades.

At 10:50 a.m. ET, the Dow Jones Industrial Average is up 0.4%, while the S&P 500 Index and the Nasdaq Composite are increasing 0.5%. WTI crude oil is rising $0.28 to $56.53 per barrel, Brent crude oil is advancing $0.50 at $62.90 per barrel, and wholesale gasoline is $0.02 higher at $1.89 per gallon. The Bloomberg gold spot price is ticking $1.41 higher to $1,420.05 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—is little changed at 96.69.

ADP employment report misses, trade deficit widens, services sector reports mixed

The ADP Employment Change Report showed private sector payrolls rose by 102,000 jobs in June, below the Bloomberg forecast of a 140,000 gain, while May’s increase of 27,000 jobs was revised to a 41,000 rise. Today’s ADP data, which does not include government hiring and firing, comes ahead of Friday’s broader June nonfarm payroll report, expected to show jobs grew by 164,000 and private sector payrolls rose by 155,000. The unemployment rate is forecasted to remain at 3.6% and average hourly earnings are projected to rise 0.3% month-over-month (m/m), and be up 3.2% year-over-year (y/y).

The trade balance showed that the deficit widened more than expected to $55.5 billion in May, compared to estimates of $54.0 billion. April’s deficit was revised higher to $51.2 billion. Exports rose 2.0% m/m to $210.6 billion, while imports increased 3.3% to $266.1 billion.

The June Institute for Supply Management (ISM) non-Manufacturing Index declined to 55.1 from May’s 56.9, and versus forecasts of a dip to 56.0. The index hit the lowest level since July 2017 but remained comfortably in expansion territory as depicted by a reading above 50. New orders, business activity and employment all declined but continued to expand, and prices rose 3.5 points to 58.9. Non-manufacturing activity accounts for a large majority of U.S. economic output. The ISM said comments from respondents reflected mixed sentiment about business conditions and the overall economy, while a degree of uncertainty exists due to trade and tariffs.

Weekly initial jobless claims declined 8,000 to 221,000, compared to estimates of 223,000, with the prior week’s figure being revised higher by 2,000 to 229,000. The four-week moving average rose by 500 to 222,250, while continuing claims dropped by 8,000 to 1,686,000, north of estimates of 1,675,000.

The MBA Mortgage Application Index dipped 0.1% last week, following the prior week’s 1.3% increase. The slight decrease came as a 1.2% decline in the Refinance Index was met with a 1.1% gain for the Purchase Index. The average 30-year mortgage rate ticked 1 basis point (basis point) higher to 4.07%.

Factory orders declined 0.7% m/m in May, versus expectations of a 0.6% decrease, and compared to April’s downwardly-revised 1.2% drop. Stripping out the volatile transportation component, orders ticked 0.1% higher, versus April’s negatively-adjusted 0.2% rise. Final durable goods orders were unrevised at a 1.3% m/m decline for May, and orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, were revised upward to a 0.5% increase.

Treasuries are mostly rising, with the yield on the 2-year note flat at 1.76%, while the yields on the 10-year note and the 30-year bond are decreasing 3 bps to 1.95% and 2.47%, respectively.

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