Weak economic reports send stock indexes lower
NEW YORK — Weak reports on hiring and service industries sent the stock market sharply lower Wednesday, giving the Dow Jones industrial average its worst day in more than a month.
The Dow fell 111.66 points, or 0.8 percent, to 14,550.35, its worst decline since Feb. 25. The Standard & Poor's 500 index dropped 16.56 points, or 1.1 percent, to 1,553.69. Both indexes closed at record highs the day before.
The stock market started 2013 with a rally as investors became more optimistic about the economy, especially housing and jobs. The reports Wednesday disappointed the market and came two days after news that manufacturing growth slowed unexpectedly last month.
The losses were widespread. All 10 industry groups in the S&P 500 index fell. Banks and energy stocks had the worst losses, 1.7 percent and 1.6 percent. Utilities, which investors hold when they want to play it safe, fell the least, 0.3 percent.
“The market is overdue for a correction,” said Joe Saluzzi at Themis Trading. “I don't think that the economy supports this type of a rally.” Signs of investor skittishness appeared across a number of different markets.
Commodities slumped. Crude oil dropped $2.74, or 2.8 percent, to close at $94.45 a barrel and industrial metals like copper fell.
The yield on the 10-year Treasury note fell to 1.81 percent from 1.86 percent. The decline means investors are moving money into low-risk U.S. government debt.
The Russell 2000 index, which tracks small company stocks, fell for a third straight day, dropping 1.7 percent. It's now down 3.5 percent so far this week, far worse than the declines in the Dow, 0.2 percent, and the S&P, 1 percent. That's another signal that investors may be becoming more bearish about the economy.
Small company stocks, which did better than the Dow and the S&P 500 in the first three months of the year, are more sensitive to the outlook than the larger companies in the Dow and S&P. That's because they rely far more on domestic sales than global giants like IBM and Caterpillar, which sells heavy machinery and construction equipment around the globe.
The Dow Jones Transportation Average, an index of 20 stocks including airlines like Delta and freight companies FedEx and UPS, fell more than 1 percent for a third straight day. The index, which is regarded as a leading indicator for broader market indexes as well as the economy, has fallen 3.9 percent this week, after surging 17.9 percent in the first quarter.
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.
Separately, payrolls processor ADP reported that U.S. employers added 158,000 jobs last month, down from February's gain of 237,000. The ADP report is often seen as a preview for the government's broader survey on employment due on Friday.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- NHTSA probes sudden acceleration complaints in Toyota Corollas
- Cranberry-based Prodigo Solutions: Hospitals can reduce high supply costs
- Consumer spending climbs as job gains boost incomes
- With acquisition, PNC set to enter IPO market
- Another card system hack at Supervalu, Albertsons
- Stocks decline on overseas political troubles
- State cites Patriot Coal in W.Va. mine accident
- Columbia Gas parent to spin off pipeline operations
- Study: Wellness programs don't save money, but employee health improves
- Jobless baby boomers struggle to get back in game
- Treasury’s clampdown on tax inversions takes bite out of share prices