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U.S. Stocks Posting Steep Losses In Mid-Day Trading

wallstreet sept05 02oct19 lt

After coming under pressure early in the session, stocks have seen some further downside over the course of the trading day on Wednesday. The major averages are extending the sharp pullback seen in the previous session.

Currently, the major averages are lingering near their worst levels of the day. The Dow is down 502.96 points or 1.9 percent at 26,070.08, the Nasdaq is down 132.67 points or 1.7 percent at 7,776.01 and the S&P 500 is down 51.89 points or 1.8 percent at 2,888.36.

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.

Sector News

Reflecting concerns about the outlook for global demand, steel stocks have moved sharply lower over the course of the trading session. The NYSE Arca Steel Index has plummeted by 2.6 percent, hitting its lowest intraday level in almost a month.

Substantial weakness has also emerged among transportation stocks, as reflected by the 2.5 percent nosedive by the Dow Jones Transportation Average. The average has also slumped to a one-month low.

Chemical, energy, telecom, and brokerage stocks are also seeing considerable weakness on the day, reflecting broad based selling pressure on Wall Street.

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

With gold for December delivery jumping $15.50 to $1,504.50 an ounce, the NYSE Arca Gold Bugs Index has surged up by 1.7 percent.

Other Markets

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 showed more substantial moves to the downside on the day. While the German DAX Index plunged by 2.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index plummeted by 3.1 percent and 3.2 percent, respectively.

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 4.7 basis points at 1.597 percent.

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