Stocks fall nearly 1% on anxiety about Friday's employment report

May 01, 2013|By Andrew Tangel
  • Traders on the floor of the New York Stock Exchange on Wednesday.
Traders on the floor of the New York Stock Exchange on Wednesday. (Spencer Platt / Getty Images )

NEW YORK -- The first day of May gave investors reasons to worry about a sluggish economy, sending stocks down nearly 1% Wednesday.

The Dow Jones industrial average fell 138.85 points, or 0.94%, to 14,700.95 at the closing bell on Wall Street.

The broader Standard & Poor's 500 index dropped 14.87, or 0.93%, to 1,582.70. The technology-focused Nasdaq fell 29.66 points, or 0.89%, to 3,299.13.

After stocks' strong run in April, investors faced downbeat economic data signaling slowing growth in China and the United States.

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First came disappointing manufacturing data out of China. Then came payroll processing firm ADP's report showing the U.S. economy added only 119,000 net new private-sector jobs in April -- far below the 150,000 analysts had expected.

The U.S. Labor Department is set to report the economy's April job growth and unemployment rate on Friday.

Given last month's lackluster labor market report, investors are weary of a negative trend emerging, said Jack Ablin, chief investment officer at BMO Private Bank.

“The market now is setting up for a disappointment,” he said. 

The Federal Reserve has been pumping in billions of dollars into the economy by buying bonds to keep interest rates low. That has helped fuel a rally in the stock market this year. Despite Wednesday's declines, the Dow is up 12% for the year, and the S&P 500 is up 11%.

On Wednesday, the Fed signaled it would continue its stimulus but also that it was ready to increase or reduce the program depending on the pace of the economy's recovery.


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