LONDON: Wall Street and oil prices slipped on Wednesday as a disappointing private US jobs report and the coronavirus Delta variant weighed on investor sentiment.

European stock markets closed higher but the Dow fell after a report showed that hiring by American firms had been far smaller than expected in July.

Hiring slowed to 330,000 last month, with dramatically lower gains in the construction and leisure and hospitality sectors, according to payroll services firm ADP.

"The big miss with the ADP raised concerns that the Delta variant is having a bigger impact on the economy," said OANDA senior market analyst Edward Moya.

"The labour market recovery is extremely uneven and suggests the economy continues to struggle in matching individuals up with the current job vacancies," Moya said.

The disappointing data came ahead of Friday's much-anticipated government employment report, which is expected to show a gain of as much as a million jobs.

Asian stock markets mostly advanced following Tuesday's latest record close for the S&P 500 on Wall Street. The S&P 500 was down on Wednesday while Nasdaq was flat in midday trading.

Markets have cheered a series of strong company earnings in recent weeks but the lacklustre US job reports and the growing threat of the Delta variant, which prompted China to tighten travel restrictions, have raised concerns.

The dollar seesawed, falling on the private jobs report but rallying later as data showed that an index measuring the health of the massive US service sector climbed to a new all-time high in July.

              **- Delta blues -**

Crude oil prices fell by more than two percent as the market frets over concerns that crude demand in China could tumble as a result of the tough new lockdown measures.

A surprise increase in US crude stockpiles also influenced oil prices.

"The fact that the Delta variant of the coronavirus is spreading fast is increasingly worrying, as the latest news alters the prospects of economic recovery, especially if governments decide to move toward stricter lockdown measures to break the transmission chains," said Ipek Ozkardeskaya, senior analyst at online bank Swissquote.

The main worry surrounds the world's second biggest economy China, where millions of people have been put into lockdown.

The country had brought domestic cases of the coronavirus down to virtually zero after the disease first emerged in Wuhan in late 2019, but it is now facing its worst outbreak in months.

"While China's resolve to control outbreaks has been well illustrated, markets will continue to watch the outbreak given the high transmissibility of the Delta variant," said National Australia Bank's Tapas Strickland.