A bundle of poor economic news sent stocks sliding and beat the S&P 500 back from its record-high closing of the previous day, even though the Federal Reserve’s Open Market Committee reaffirmed its quantitative easing program in its latest policy statement.
A report from the Institute for Supply Management showed slower than expected growth in the manufacturing sector during the month of March, with its index down from 51.3 to 50.7, and some regional indicators signaling contraction in areas of the country during the month of April.
This was accompanied by a Commerce Department report that showed construction spending for the month of March was down 1.7 percent, the second monthly drop of 2013.
To make matters worse, ahead of the Labor Department’s private and public sector jobs estimates on Friday, the payrolls report from Automatic Data Processing showed that the private sector added 119,000 jobs during the month of April, 31,000 less than had been expected, and less than in March.
The latter piece of news in particular has many worried that Friday’s report from Labor will confirm fears that the effects of sequestration on the U.S. job market are beginning to show up in earnest, as government spending continues to dry up in accordance with the automatic, across-the-board cuts that were triggered on the 1st of March.
The S&P 500 closed at 1,582.76, down 0.93 percent, led by drug manufacturer Allergan, Inc. (AGN), down 12.85 percent to $98.96 after the company announced that late-stage testing for an upcoming experimental eye treatment would be delayed by at least a year.
The communications equipment and services provider JDS Uniphase (JDSU) was the day’s second biggest percentage loss, down 7.48 percent to $12.49 ahead of its earnings report slated for release during late trading. Amazon dropped 2.18 percent to $248.28, while drug manufacturer Merck & Co. (MRK) was down 2.83 percent to $45.67 after its own disappointing earnings report was released earlier in the morning.
The Dow was down 0.94 percent to 14,700.95 under the weight of tech and financial stocks, with Verizon (VZ) dropping 2.76 to $54.42, Cisco Systems (CSCO) down 2.13 percent to $20.48, International Business Machines (IBM) down 1.06 percent to $200.39. Microsoft was also down a slight 0.79 percent to $32.84 on high volume.
JPMorgan Chase & Co. (JPM) was down 2.04 percent to $48 per share, while Bank of America (BAC) lost 1.22 percent to $12.16, and the Travelers Companies Inc. (TRV) dropped 1.14 percent to $84.44.
The Nasdaq was took a 0.89 percent loss to close at 3,299.13 also taking a downward push from tech shares as Blackberry (BBRY) lost 3 percent to end the day at $15.80, Yahoo! Inc. (YHOO) down 1.74 percent to $24.30, and data storage provider NetApp Inc. (NTAP) down 2.12 percent to $34.15.
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