Wall Street began Wednesday under pressure from the ongoing free fall in Japanese markets, and was further hampered by underwhelming domestic economic data throughout the day as stocks were hit with losses across the board.
The ADP Employer Services survey of non-farm private sector payroll data was released, showed that 135,000 jobs were added for the month of May, shy of the 165,000 forecasted by economists, leading to fears about the official Labor Department statistics set to come out on Friday.
According to the Bureau of Labor Statistics, unit labor costs for nonfarm businesses fell 4.3 percent in the first quarter, with the drop in hourly compensation far worse than the 0.5 percent increase that had been expected. Meanwhile, the Census Bureau said that factory orders were up only 1 percent in April, 0.5 percent shy of forecasted gains.
The barrage of negative data points totally overwhelmed the release of the Fed’s Beige Book business survey, which indicated “modest to moderate growth” in the U.S. economy. Recent and somewhat conflicting statements from the Federal Reserve regarding the eventual drawdown of its $85 billion per month stimulus spending program has begun to take its toll on stocks this week.
The S&P 500 was dragged down 1.38 percent to 1,608.9 points. Ford Motors (F) was down 3.36 percent to $15.25, Intel Corporation (INTC) was down 2.60 percent to $24.70, and biotech firm Gilead Sciences (GILD) lost 4.20 percent to $50.21.
A couple of bright spots on the index were to be found in Juniper Networks (JNPR), up 6.61 percent to $18.54 after announcing a new product to protect servers from DDoS attacks, and Dollar general (DG) was up 3.19 percent to $50.19 on a rebound resulting from revisions to forecasts released earlier in the week in an otherwise disappointing earnings report.
The Dow lost 1.43 percent to 14,960.59 with no gains for any of the index’s components. Among the hardest hit were Intel (INTC), down 2.60 percent to $24.70, Bank of America (BAC) was down just over 2 percent to $13.09, and General Electric (GE) was down 1.44 percent to $23.32.
The Nasdaq fared slightly better than its colleagues, dropping to 3,401.48, a loss of 1.27 percent. Tech stocks put heavy pressure on the index with high volume retreats for Facebook (FB), down 2.64 percent to $22.90, while Yahoo! (YHOO) lost nearly 2 percent to $25.75.
Online gaming company Zynga (ZNGA) dropped nearly 6 percent to $2.87 and continues to struggle after announcing huge layoffs at the company at the beginning of the week.