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Renewed Economic Worries Weighing On Wall Street

wallstreet july20 02oct19 lt

Stocks have moved substantially lower in morning trading on Wednesday, extending the sharp pullback seen over the course of the previous session. With the steep drop, the major averages have tumbled to their lowest intraday levels in a month.

Currently, the major averages are off their lows of the session but stuck firmly in the red. The Dow is down 348.21 points or 1.3 percent at 26,224.83, the Nasdaq is down 99.15 points or 1.3 percent at 7,809.53 and the S&P 500 is down 39.23 points or 1.3 percent at 2,901.02.

The sell-off on Wall Street comes as disappointing jobs data from payroll processor ADP has added to economic concerns raised by yesterday's weak manufacturing data.

ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.

The report also showed a significant downward revision to the increase in private sector jobs in August, which was slashed to 157,000 jobs from the originally reported 195,000 jobs.

"Businesses have turned more cautious in their hiring," said Mark Zandi, chief economist of Moody's Analytics. "If businesses pull back any further, unemployment will begin to rise."

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, noted the average monthly job growth for the past three months has fallen to 145,000 from 214,000 in the same time period last year.

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

Employment is expected to increase by 140,000 jobs in September after rising by 130,000 jobs in August, while the unemployment rate is expected to hold at 3.7 percent.

Software stocks are turning in some of the market's worst performances in morning trading, resulting in a 2 percent drop by the Dow Jones U.S. Software Index. The index has fallen to a nearly two-month intraday low.

Considerable weakness has also emerged among steel stocks, as reflected by the 2 percent slump by the NYSE Arca Steel Index. Earlier in the session, the index hit its lowest intraday level in almost a month.

Pharmaceutical, telecom, and computer hardware stocks are also seeing significant weakness, reflecting broad based selling pressure on Wall Street.

Meanwhile, gold stocks are among the few groups bucking the downtrend, benefiting from an increase by the price of the precious metal.

With gold for December delivery climbing $7.90 to $1,496.90 an ounce, the NYSE Arca Gold Bugs Index is up by 1 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.5 percent, while Hong Kong's Hang Seng Index dipped by 0.2 percent.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has plunged by 2.6 percent, the French CAC 40 Index is down by 2.2 percent and the German DAX Index is down by 1.8 percent.

In the bond market, treasuries are extending the upward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.6 basis points at 1.618 percent.

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