US stocks slide for a second day
A batch of discouraging economic news deepened investors' concerns about corporate earnings, pulling major US stock indexes down for the second day in a row.
The modest slide cut the Standard & Poor's 500 index's gain for the year to less than one-tenth of a percent. Oil prices surged above 50 dollars a barrel on signs that US production growth is slowing.
Payroll processor ADP said US companies added fewer jobs last month than economists had expected, while an index of manufacturing activity declined for the fifth month in a row.
In addition, the government said US construction spending fell in February.
"The data show we definitely hit a bit of a slowdown in the first quarter, and now investors are getting worried about the upcoming earnings reports," said Chris Gaffney, a senior market strategist at EverBank Wealth Management.
Many of the stocks that fell the most today were also some of the biggest gainers during the first three months of the year.
The health care sector notched the biggest decline in the S&P 500. Even so, it is up 4.8% this year, leading the nine other sectors in the index.
The Dow Jones industrial average fell 77.94 points, or 0.4%, to 17,698.18. The 30-company index was down as much as 191 points. It is down 0.7% for the year.
The S&P 500 index slid 8.16 points, or 0.4%, to 2,059.69. The index is now up 0.04% for the year.
The Nasdaq composite lost 20.66 points, or 0.4%, to 4,880.23. The tech-heavy index ended is up about 3% this year.
Half of the 10 sectors in the S&P 500 fell. Telecommunications services led among the gainers, rising 0.8%.
Macerich fell the most in the index, sliding 5.60 dollars, or 6.6%, to 78.73 dollars. The company slumped after rival Simon Property Group called off its hostile 16.8 billion dollar takeover bid for the shopping mall operator.
Investors have been weighing mixed economic data this week in advance of the next round of corporate earnings, which begins next week.
Yesterday, they got a dash of encouraging data on consumer confidence, spending and home prices. But today's slate clouded the economic picture.
ADP said US companies added a seasonally adjusted 189,000 jobs last month. That was below market expectations for an increase of around 250,000.
Also, the Institute for Supply Management's US manufacturing index slipped in March, reflecting slower growth in factory orders. US construction spending declined in February for the second month in a row.
It is likely the weak ADP jobs report prompted some traders to make moves today in anticipation that the government's March payroll employment tally will also be discouraging.
That report is due out on Friday, but US markets will be closed for the Good Friday holiday.
Earnings for companies in the S&P 500 index are expected to be down 3.1% overall, according to S&P Capital IQ.
Investors have reduced expectations for corporate earnings due to concerns over the impact falling oil prices and a strong dollar may have on big companies. The dollar has strengthened by about 9% so far this year.
"We think the second quarter probably won't look very good as well," said James Liu, global market strategist for JP Morgan Asset Management.
"The hope is that by the third and fourth quarters, these two big effects with the US dollar and oil will have stabilised, and so you'll see a bounce back in earnings at that point."
The price of oil rose sharply today on signs that US production growth is slowing, a weaker dollar that makes oil a more attractive investment to overseas buyers, and anticipation that a delay in talks with Iran over its nuclear programme could keep Iranian oil off the world market.
Benchmark US crude rose 2.49 dollars to close at 50.09 dollars a barrel in New York. Brent crude, a benchmark for international oils used by many US refineries, fell 1.99 dollars to close at 57.10 dollars in London.