06/05/2015 19:18 AST
US stocks turned negative on Wednesday, after opening slightly higher, as disappointing data, including weaker-than-expected private jobs numbers, fuelled concerns about the economy’s potential to rebound from a first-quarter slump.
Stock markets globally have also been under pressure as the worldwide sell-off in government bonds deepened, spreading unease across all assets.
ADP payroll data showed US private employers added 169,000 jobs last month, the fewest since January 2014 and far below economists’ expectations, posing a downside risk for the more comprehensive nonfarm payrolls report.
“This is certainly going to change expectations for Friday’s numbers,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
“Some people think that the Fed will now delay raising rates.” Adding to the weak jobs data, applications for US home mortgages fell last week as interest rates jumped, while nonfarm productivity fell in the first quarter as harsh winter weather weighed on output.
At 10.04am EDT (1404 GMT) the Dow Jones Industrial Average was down 68.5 points, or 0.38 per cent, at 17,859.7, the S&P500 was down 6.02 points, or 0.29 per cent, at 2,083.44 and the Nasdaq Composite was down 18.09 points, or 0.37 per cent, at 4,921.24.
Nine of the 10 S&P sectors were lower, with only the energy index gaining 0.6 per cent as oil prices hit fresh 2015 highs.
Tech stocks, led by Apple and Microsoft, were the biggest drag on the three major indices.
Deal-making
The weak data and bond markets also overshadowed strong results from corporates and a mini revival in deal-making.
MoneyGram soared 23.08 per cent to $9.60 after Bloomberg reported that Western Union was considering buying its smaller rival. Western Union rose as much as 9 per cent to a record high of $22.84 Herbalife jumped 16.14 per cent to $46.59 after the weight-loss and nutritional products maker raised its full-year profit forecast.
Synageva BioPharma soared 111.94 per cent to $203.06 after Alexion offered to buy the company at a 135.7 per cent premium to Tuesday’s close. Alexion was down nearly 10.5 per cent at $150.82.
Wendy’s rose 6.3 per cent to $11.08 and EA gained 5.5 per cent to $62.43 after the two companies reported better-than-expected results.
MetLife, Tesla and TripAdvisor are scheduled to report results after the bell.
Declining issues outnumbered advancing ones on the NYSE by 1,797 to 991, for a 1.81-to-1 ratio on the downside; on the Nasdaq, 1,334 issues fell and 1,028 advanced for a 1.30-to-1 ratio favouring decliners.
The benchmark S&P500 index was posting 3 new 52-week highs and 3 new lows; the Nasdaq Composite was recording 14 new highs and 33 new lows.
Reuters
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