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Stocks fall after weak reports on hiring, services
Wednesday - 4/3/2013, 11:51am EDT
AP Markets Writer
NEW YORK (AP) -- Stocks fell in early trading on Wall Street Wednesday after weak reports on hiring and growth at service companies dampened the outlook for the U.S. economy.
The Dow Jones industrial average fell 64 points, or 0.4 percent, to 14,595 as of 11:14 a.m. EDT. The Standard & Poor's 500 index dropped 10 points, or 0.7 percent, to 1,560 points. Both indexes closed at record highs the day before.
U.S. service companies kept growing at a solid pace in March, but the expansion was less than economists were expecting. The Institute for Supply Management's index of service companies fell to 54.4 from 56 a month earlier. The report was the weakest in seven months and fell short of what analysts were expecting.
Separately, payrolls processor ADP reported that U.S. employers added 158,000 jobs last month, down from February's gain of 237,000, as construction firms held off on hiring. The ADP report is often seen as a preview for the government's broader survey on employment, which is due out Friday.
The reports came after the ISM reported a slowdown in manufacturing on Monday, another poor omen for the economy.
"The economic data, which has been stronger than expected throughout most of the first quarter, may just be in for a little bit of a soft patch," said Stephen Parker, a portfolio manager at JPMorgan Private Bank. "But I think that's temporary."
The stock market has gotten off to a strong start in 2013, with both the Dow and the S&P 500 setting record highs. The Dow rose 11.3 percent in the first three months of the year thanks to a recovery in housing and signs that the job market is improving. Strong company earnings and economic stimulus from the Federal Reserve have also sent the market higher.
The yield on the 10-year Treasury note, which moves inversely to its price, fell from 1.86 percent to 1.83 percent.
In other trading, the Nasdaq composite dipped nine points, or 0.1 percent to 3,245. The Russell 2000, a gauge of small company stocks, fell more than other indexes. The Russell fell 9 points, or 1 percent, to 925.
The Dow Jones Transportation Average, an index of 20 stocks including airlines like Delta, United and freight companies FedEx and UPS, fell for a third straight day. The index, which is regarded as a leading indicator for the broader indexes and the direction of the economy, has fallen 3.4 percent this week, after surging 17.9 percent in the first quarter of the year.
"The strength that we've seen in transports over the last three months has been encouraging," said JPMorgan's Parker. "That's certainly one area we will be watching closely to see if there's a shift in sentiment going forward."
Among stocks making big moves;
-- Zynga rose 43 cents, or 14 percent, to $3.50 after the online game maker said two casino games would debut in the United Kingdom Wednesday.
-- Monsanto rose $1.20 to $104.7 after the agricultural products company said its profit increased 22 percent on strong sales of biotech seeds in Brazil and other emerging markets. The company also increased its forecast for full-year earnings.
-- ConAgra Foods fell 14 cents to $35.40 after the company reported a third-quarter profit that fell shy of Wall Street expectations. The maker of Chef Boyardee and Hebrew National hot dogs booked charges related to its acquisition of Ralcorp and struggled to increase sales for its existing brands.
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