Weak Hiring Report Sends Stocks Lower 05/04 18:08
U.S. and global stock indexes moved lower a second day Wednesday following a
dismal report on job creation that gave investors concern over the state of the
economy. The data followed a round of economic news out of China and Europe a
day earlier that also suggested sluggish growth.
NEW YORK (AP) -- U.S. and global stock indexes moved lower a second day
Wednesday following a dismal report on job creation that gave investors concern
over the state of the economy. The data followed a round of economic news out
of China and Europe a day earlier that also suggested sluggish growth.
The Dow Jones industrial average lost 99.65 points, or 0.6 percent, to
17,651.26. The Standard & Poor's 500 index lost 12.25 points, or 0.6 percent,
to 2,051.12 and the Nasdaq composite fell 37.58 points, or 0.8 percent, to
Stocks started lower and remained there throughout the day, following a
survey by payroll processor ADP which showed U.S. companies hired workers at
the slowest pace in three years last month.
ADP said private companies hired 156,000 workers in April, down from 194,000
in March. The figure was significantly worse than expected. The weak reading
bodes poorly for the broader job market survey due out Friday from the Labor
Department, which is one of the most closely watched reports on the economic
calendar. Economists expect the government to report that U.S. employers
created 200,000 jobs last month and that the unemployment rate remained held
steady at 5 percent.
Other economic indicators out of Europe were disappointing on Wednesday.
Retail sales fell 0.5 percent during March from the previous month. Investors
had expected a more modest decline of 0.1 percent.
Financial information company Markit said its purchasing managers' index for
the region, a gauge of business activity, slipped to 53 in April from 53.1 the
previous month. Though still above the 50 threshold indicating expansion, the
reading has fallen from the start of the year.
While stocks are well off the lows they hit in February, investors remain
reluctant to make heavy bets back into the stock market. The S&P 500 has
bounced off the 2,100-point mark several times in the last six months, most
recently as last week. That means investors feel stocks are too expensive to
make big bets, and are waiting to see more positive data or earnings, traders
"We've run out of gas here. ... We are going to need some sort of catalyst
to move this market higher, but I don't know what that catalyst might be.
Earnings have been OK, but not strong enough to say it's time to buy," said Rob
Bernstone, a managing director in equity trading at Credit Suisse.
Among individual companies, Intercontinental Exchange, the parent company of
the New York Stock Exchange, jumped $17.51, or 7 percent, to $258.49 after the
company announced it would not bid for the London Stock Exchange. The
announcement came at the same time Intercontinental was reporting first quarter
earnings, which were better than expected.
Travel company Priceline sank $101.60, or 7.5 percent, to $1,253.04 after
the company warned that profits would slow in the second quarter.
Benchmark U.S. crude added 13 cents to close at $43.78 per barrel on the New
York Mercantile Exchange. Brent crude, used to price international oils, fell
35 cents to close at $44.62 a barrel in London. In other energy trading in New
York, wholesale gasoline fell two cents to $1.49 a barrel, heating oil fell
half a penny to $1.33 a gallon and natural gas rose six cents to $2.14 per
1,000 cubic feet.
U.S. bond prices rose. The yield on the 10-year U.S. Treasury note edged
down to 1.77 percent from 1.80 percent. The dollar rose to 106.93 yen from
106.41 yen late Tuesday. The euro fell to $1.1498 from $1.1505.
Gold fell $17.40 to $1,274.40 an ounce, silver fell 20 cents to $17.28 an
ounce and copper fell 3 cents to $2.18 a pound.