Stocks tumbled on Wednesday as Automatic Data Processing Inc. (ADP), the payrolls processor, reported that the economy added 158,000 jobs during the month of March, shy of estimates of between 198,000 and 215,000.
The ADP’s report is often used to gauge the outlook ahead of the Board of Labor’s monthly job’s report, due out on Friday, and follows on the heels of Tuesday’s weaker-than-expected ISM manufacturing index.
Perhaps even more significantly, San Francisco Federal Reserve president John Williams said that the Fed could begin pulling back on its $85 billion per month quantitative easing plan as early as the summer, possibly ending it by the time 2013 is over, pending expected improvements in the labor market.
On the international political scene, the unusually heated rhetoric coming out of the Korean Peninsula over the last couple weeks took its first tentative swipe at the global economy when the government of North Korea blocked South Korean workers from entering a factory run jointly by the two countries in the border town of Kaesong.
Asian markets, at least, have reflected concern, as Deutsche Bank’s Jim Reid noted this morning that the Korean won had dropped to a 6-month low against the dollar.
The Nasdaq took the hardest hit on the day, down 1.11 percent to 3,218.60, with notable losses taken by online realty service Zillow (Z) down 5.34 percent to $50.16, and Tesla (TSLA), whose CEO Elon Musk’s major announcement on Tuesday about a new $500 per month leasing plan for the company’s model S sedan was poorly received, dragging shares down 7.31 percent to close at $41.40.
The S&P 500 lost 1.05 percent, closing at 1,553.69, with Netflix (NFLX) down almost 3.93 percent to $169.74, and Citigroup (C) dropped 3.65 percent to $42.50, while Oil & Gas stocks contributed significantly to downward pressure on the index.
Meanwhile, the Dow Jones Industrial Average saw only three of its components gain on the day: drug manufacturer Merck & Co. (MRK), and aerospace/defense companies Boeing (BA) and United Technologies (UTX).
Financial stocks were the Dow’s biggest weight, with the top three losers being JP Morgan Chase (JPM), down 2.96 percent to $46.85, Bank of America (BAC) down 2.80 percent to $11.81, and American Express co. (AXP) down 2.05 percent to $66.25.