US close: Stocks end lower after weaker-than-expected ADP report
US stocks fell on Wednesday as investors digested a softer-than-expected reading on the health of the labour market.
The Dow Jones Industrial Average and the S&P 500 ended down 0.6%, while the Nasdaq closed off 0.8%.
According to private consultancy ADP, US employers added 156,000 jobs in April, compared with a downwardly-revised 194,000 in March and much weaker than expectations of 196,000.
The construction industry added 14,000 jobs, down from March’s 18,000, while manufacturing lost 13,000 jobs after being revised down to a 3,000 drop the previous month.
Mark Zandi, chief economist of Moody’s Analytics, said: “The job market appears to have stumbled in April. Job growth noticeably slowed, with some weakness across most sectors. One month does not make a trend, but this bears close watching as the financial market turmoil earlier in the year may have done some damage to business hiring.”
The weak data sparked concerns that Friday’s all-important non-farm payrolls report could also disappoint. It is expected to show employers added 200,000 jobs in April compared to 215,000 the previous month.
Meanwhile, new orders for US factory goods rose more than expected in March, the Commerce Department said. New orders for manufactured goods increased 1.1% after February's downwardly-revised 1.9% fall, beating estimates for a 0.6% gain.
Markit’s final US business services purchasing managers’ index printed at 52.8 in April, up from 51.3 in March and ahead of consensus estimates for a reading of 52.1. A level above 50 signals an expansion in the sector while a reading below that indicates a contraction.
The latest reading was the highest since January and signalled a moderate expansion of service sector business activity.
Other data showed the US trade deficit hit its lowest level in 16 months in March as imports fell the most in seven years. The trade deficit narrowed by $6.5bn to $40.4bn, marking the smallest gap since November 2014 and a little better than economists’ expectations for a deficit of $41.2bn.
March exports came in at $176.6bn, down $1.5bn from February, while imports were down $8.1bn from February at $217.1bn.
"The narrowing in the monthly deficit was driven by a massive 3.6% m/m drop back in imports, which itself was in largely due to a massive 9.9% m/m decline in consumer goods imports," Capital Economics said.
"Before we start panicking about a collapse in US domestic demand, however, it’s worth noting that the slump in March followed an equally suspicious looking 7.4% m/m surge in consumer goods imports in February."
Oil prices settled mixed after US government data revealed commercial crude stockpiles rose by 2.8 million barrels last week to 543.4 million barrels, more than the 1.7m barrels expected.
West Texas Intermediate was up 0.5% to $43.88 per barrel and Brent crude was down 0.5% at $44.75.
In company news, Priceline plunged as the travel company warned investors its profit growth would slow sharply in the second quarter despite reporting strong first quarter revenue and profit gains, while Under Armour slumped after announcing the departure of two top executives.
On the upside, New York Stock Exchange owner Intercontinental Exchange surged after saying it was not planning to make a bid for London Stock Exchange.
Time Warner shares advanced after the company reported an increase in first quarter earnings that surpassed analysts’ estimates, boosted by HBO revenues.
Zillow gained after raising its full-year revenue outlook late on Tuesday.
S&P 500 - Risers
Intercontinental Exchange Inc (ICE) $258.44 +7.25%
ONEOK Inc. (OKE) $38.19 +6.69%
NRG Energy Inc. (NRG) $14.61 +4.17%
Seagate Technology Plc (STX) $20.16 +3.70%
Welltower Inc (HCN) $74.37 +3.51%
Stericycle Inc. (SRCL) $97.59 +3.22%
Ventas Inc. (VTR) $65.44 +3.15%
Realty Income Corp. (O) $62.40 +2.78%
Frontier Communications Co. (FTR) $5.36 +2.68%
AvalonBay Communities Inc. (AVB) $185.17 +2.09%
S&P 500 - Fallers
Under Armour Inc. Class A (UA) $39.48 -7.61%
Priceline Group Inc (PCLN) $1,253.04 -7.50%
Anadarko Petroleum Corp. (APC) $47.05 -6.09%
Marathon Oil Corp. (MRO) $12.16 -4.93%
Marathon Petroleum Corporation (MPC) $36.22 -4.65%
Newmont Mining Corp. (NEM) $32.33 -4.43%
Devon Energy Corp. (DVN) $31.32 -4.37%
TripAdvisor Inc. (TRIP) $63.08 -4.18%
Western Union Co. (WU) $19.01 -4.14%
Mylan Inc. (MYL) $41.94 -4.01%
Dow Jones I.A - Risers
McDonald's Corp. (MCD) $129.34 +0.73%
Procter & Gamble Co. (PG) $81.59 +0.60%
Home Depot Inc. (HD) $135.18 +0.48%
Verizon Communications Inc. (VZ) $50.85 +0.34%
Coca-Cola Co. (KO) $44.98 +0.31%
Wal-Mart Stores Inc. (WMT) $67.17 +0.25%
Microsoft Corp. (MSFT) $49.87 +0.18%
International Business Machines Corp. (IBM) $144.26 +0.09%
Dow Jones I.A - Fallers
Caterpillar Inc. (CAT) $74.26 -2.75%
Goldman Sachs Group Inc. (GS) $160.14 -1.84%
General Electric Co. (GE) $30.07 -1.83%
Intel Corp. (INTC) $29.85 -1.68%
JP Morgan Chase & Co. (JPM) $61.55 -1.61%
Cisco Systems Inc. (CSCO) $26.44 -1.56%
United Technologies Corp. (UTX) $100.65 -1.45%
Boeing Co. (BA) $130.89 -1.21%
Apple Inc. (AAPL) $94.19 -1.04%
American Express Co. (AXP) $64.26 -0.91%
Nasdaq 100 - Risers
Seagate Technology Plc (STX) $20.16 +3.70%
Stericycle Inc. (SRCL) $97.59 +3.22%
Baidu Inc. (BIDU) $177.28 +1.67%
Kraft Heinz Co. (KHC) $79.98 +1.65%
Liberty Media Corporation - Series C (LMCK) $18.74 +1.63%
Liberty Media Corporation - Class A (LMCA) $19.04 +1.38%
Illumina Inc. (ILMN) $134.98 +1.00%
Sba Communications Corp. (SBAC) $99.79 +0.77%
Ross Stores Inc. (ROST) $57.65 +0.61%
Western Digital Corp. (WDC) $39.60 +0.61%
Nasdaq 100 - Fallers
Priceline Group Inc (PCLN) $1,253.04 -7.50%
Incyte Corp. (INCY) $68.69 -4.72%
Tesla Motors Inc (TSLA) $222.56 -4.20%
TripAdvisor Inc. (TRIP) $63.08 -4.18%
Mylan Inc. (MYL) $41.94 -4.01%
American Airlines Group (AAL) $33.21 -3.96%
Biogen Inc (BIIB) $263.12 -3.87%
Biomarin Pharmaceutical Inc. (BMRN) $82.12 -3.49%
PACCAR Inc. (PCAR) $55.88 -3.42%
Micron Technology Inc. (MU) $10.02 -3.33%