Forexpros – U.S. stocks dropped on Wednesday, after downbeat U.S. employment data and a string of weak economic reports from the euro zone weighed on market sentiment.
During early U.S. trade, the Dow Jones Industrial Average fell 0.36%, the S&P 500 index dropped 0.51%, while the Nasdaq Composite index declined 0.24%.
U.S. payroll processing firm ADP said that non-farm employment rose by 119,000 in April, the lowest increase since September 2011, after a 201,000 rise the previous month. Analysts had expected non-farm employment to rise by 178,000 in April.
The euro weakened earlier after the final euro zone manufacturing data for April came in weaker-than-expected, with the manufacturing purchasing managers’ index slumping to a 34-month low of 45.9 in April, down from 47.7 in March and below the preliminary estimate of 46.0.
German manufacturing output fell at the fastest rate since July 2009, with its manufacturing PMI tumbling to 46.2, from 48.4 in March, while a separate report showed that the German unemployment rate also rose last month.
A separate report showed that the unemployment rate in the euro zone rose to a fresh record high of 10.9% in March.
Chesapeake Energy was one of the session’s top losers, with shares sinking 9.49% after the company reported an unexpected first-quarter loss, cut cash flow estimates, reduced its drilling budget and said it may run out of money next year under the weight of the lowest natural-gas prices in a decade.
The oil company was also in focus following reports that, besides his chairman functions, CEO Aubrey McClendon ran a USD200 million hedge fund that traded in the same commodities Chesapeake produces.
Financial stocks were also broadly lower, as Citigroup saw shares tumble 1.82% and JP Morgan plunged 1.62%, while Goldman Sachs and Bank of America plummeted 1.23% and 1.20% respectively.
In earnings, Comcast dove 2.48% although the parent company of CNBC beat earnings and revenue expectations, thanks to continuing growth in Internet subscribers and the start of a turnaround at the NBC broadcast business.
Time Warner also declined 1% after saying revenue rose 4% from the same period last year but that impairment charges kept the company from posting higher quarterly earnings.
Meanwhile, News Corp shares jumped 1.21% after BSkyB posted record nine-month operating profit boosted by strong broadband growth, showing few side effects from problems affecting its biggest shareholder.
On Tuesday, Murdoch was said to be “an unfit person to exercise the stewardship of a major international company,” by a committee of British parliamentarians.
Markets were also eyeing Facebook Inc’s initial public offering, scheduled to start on Monday, meaning the company’s shares should begin trading on May 18.
Across the Atlantic, European stock markets were mixed. The EURO STOXX 50 dropped 0.43%, France’s CAC 40 rose 0.54%, Germany’s DAX declined 0.48%, while Britain’s FTSE 100 tumbled 0.79%.
During the Asian trading session, Hong Kong’s Hang Seng Index climbed 0.97%, while Japan’s Nikkei 225 Index was up 0.15%.
Later in the day, the U.S. was to produce government data on factory orders and crude oil stockpiles.
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