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Jobs data points to easing labor market

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ISM services PMI weaker than expected

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Paramount jumps on report of Skydance Media deal

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First Foundation ( FFWM ) slumps after capital raise

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Indexes up: Dow 0.04%, S&P 0.18%, Nasdaq 0.18%

(Updated at 10:06 a.m. ET/1406 GMT)

By Ankika Biswas and Lisa Pauline Mattackal

July 3 (Reuters) -

U.S. stock indexes edged higher on Wednesday in a

holiday-shortened trading session, as data pointing to a

softening economy raised hopes for a September start to the

Federal Reserve's policy easing.

The equity market will close early on Wednesday and stay

shut on Thursday on account of U.S. Independence Day, keeping

trading volumes thin throughout the week.

Both the ADP Employment report and weekly jobless claims

data pointed to easing labor market conditions, a welcome signal

ahead of Friday's closely watched non-farm payrolls report.

Markets hope signs of weakness in the labor market will boost

chances of the Fed cutting interest rates.

"It's quite a strong unemployment claims number, and

it's fitting in with an overall trend that's probably an

indication of loosening up in the jobs market. It must be quite

welcoming for the Fed," said David Morrison, Trade Nation senior

market analyst.

Additionally,

PMI data

from the Institute for Supply Management was weaker than

expected, and factory orders unexpectedly slumped, strengthening

the case for easing policy.

Wednesday's data prompted market participants to boost

bets of a September rate cut to over 70%, as per LSEG's

FedWatch.

The Fed's June meeting minutes are due later in the day.

Tesla jumped 3.9%, trading at a near six-month high

after a more than 10% gain on Tuesday following a

smaller-than-expected drop in second-quarter vehicle deliveries.

The Philadelphia SE Semiconductor Index rose 0.5%,

helped by gains in the U.S. listing of Taiwan Semiconductor

Manufacturing and Broadcom ( AVGO ), which rose 2.0% and

1.8%.

However, megacaps Nvidia ( NVDA ), Alphabet,

Microsoft ( MSFT ), and Amazon.com ( AMZN ) slipped between 0.1%

and 1%.

On the other hand, an index of smallcap stocks was

0.4% higher, while the economically sensitive materials

and utilities S&P 500 subsectors were up

0.9% and 1.1%.

"The tendency at the moment is towards rotation ... we

have quite a few days where we see the Russell down, and tech up

and vice versa," Morrison said, though noting that the market's

optimism around megacap tech stocks was still strong.

As the S&P 500 has jumped over 15% in the first half of

2024, largely supported by top-tier high momentum

technology-related stocks, the benchmark index's equal-weighted

counterpart only rose 5% and small and mid-cap stocks

have significantly lagged.

At 10:06 a.m. ET, the Dow Jones Industrial Average

was up 14.44 points, or 0.04%, at 39,346.29, the S&P 500

was up 9.83 points, or 0.18%, at 5,518.84, and the Nasdaq

Composite was up 32.02 points, or 0.18%, at 18,060.78.

Among other movers, Paramount Global ( PARAA ) jumped 10%

after Shari Redstone's National Amusements reached a preliminary

deal to sell its controlling interest in the media giant to

David Ellison's Skydance Media.

Lender First Foundation ( FFWM ) shed 24.7% after the

company, which holds a huge portfolio of multifamily real estate

loans, disclosed a $228 million unexpected capital raise.

Advancing issues outnumbered decliners by a 3.43-to-1 ratio

on the NYSE and by a 1.73-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and three new

lows, while the Nasdaq recorded 25 new highs and 65 new lows.