Stocks hit for six as jobs news gives investors the jitters
US stocks have taken their biggest loss in more than six weeks as investors reacted to mounting evidence that hiring has slowed down.
Energy and health care companies fell sharply, and so did retailers.
Stocks slumped after ADP, a payroll processing company, said private businesses added fewer jobs in June than investors had expected. The losses deepened in afternoon trading.
Bond prices fell and yields jumped, which hurt companies that pay large dividends, such as major drug companies and real estate investment trusts. Retailers sank after L Brands, the parent company of Victoria's Secret, reported weak sales in June.
The ADP survey was the latest piece of evidence that hiring has slowed down in recent months. That has investors worried, because the European Central Bank may start raising rates soon and rates are already rising in the US Higher interest rates tend to slow down economic growth.
The Standard & Poor's 500 index dropped 22.79 points, or 0.9%, to 2,409.75. The Dow Jones industrial average fell 158.13 points, or 0.7%, to 21,320.04. The Nasdaq composite sank 61.39 points, or 1%, to 6,089.46. The Russell 2000 index, which is comprised of smaller, more US-focused companies, shed 19.33 points, or 1.4%, to 1,400.81.
ADP's survey showed that private US businesses added 158,000 jobs in June, and the firm lowered its estimates for job growth in April and May. The unemployment rate is at 40-year lows, but there isn't much evidence that wage gains and economic growth are speeding up.
All of the 61 health care companies listed on the S&P 500 lost ground. Biotech drugmaker Amgen declined 2.54 dollars, or 1.5%, to 171.72 dollars and medical device maker Medtronic lost 1.64 dollars, or 1.8%, to 87.26 dollars.
Drugmaker Merck skidded 1.06 dollars, or 1.7%, to 63.10 dollars after it stopped two studies of its cancer drug Keytruda as a treatment for multiple myeloma.
Merck said more patients who were treated with Keytruda died, and the Food and Drug Administration halted the studies because the risks of a treatment regimen that included Keytruda outweighed the potential benefits.
L Brands said its sales fell 6% in June as the company continues to struggle with the effects of ending its swimwear business. The stock gave up 7.62 dollars, or 14.1%, to 46.49 dollars, by far the largest loss of any S&P 500 company. Athletic apparel maker Under Armour fell 1.49 dollars, or 6.7%, to 20.65 dollars.
Technology companies, which have been in a swoon over the last month, turned lower again. Apple sank 1.36 dollars to 142.73 dollars and Intel dropped 71 cents, or 2.1%, to 33.63 dollars.
The dollar slipped to 113.26 yen from 113.35 yen. The euro rose to 1.1423 dollars from 1.1340 dollars.
Germany's DAX fell 0.6% and the CAC 40 in France was 0.5% lower. The British FTSE 100 index lost 0.4%. Japan's Nikkei 225 fell 0.4% and the Kospi in South Korea edged down less than 0.1%. The Hang Seng of Hong Kong shed 0.2%.