U.S. stocks fell with the dollar, while Treasuries climbed as weaker-than-estimated data on hiring and manufacturing reinforced concern that the economic recovery may be faltering. Oil rose after American crude output dropped.
The Standard & Poor’s 500 Index slipped 0.4 percent by 4 p.m. in New York, after capping its ninth straight quarterly advance. Yields on 10-year Treasuries fell seven basis points to 1.86 percent. The Bloomberg Dollar Spot Index dropped 0.2 percent after four days of gains. West Texas Intermediate crude rallied 5.2 percent for the biggest advance in two months.
U.S. factories expanded in March at the slowest pace since May 2013, while ADP Research Institute data showed companies added fewer workers last month than economists forecast. The figures came two days before a government report forecast to show hiring rose by 245,000 in March. The Federal Reserve has said its first rate increase since 2006 will depend on data showing economic strength and a return to its inflation target.
“We’re still coming out with this idea that the economy’s slowed a bit,” said Jim Dunigan, chief investment officer at PNC Bank NA in Philadelphia, which oversees $135 billion. “We’re looking for some data that will suggest we rebounded from that, and with today’s ADP report a little softer than estimates we’ll wait to see where the employment number comes in. We’re in no-man’s-land as we start earnings.”
The value of global stocks climbed to a record last quarter as the Fed cut its outlook for rate increases and central banks from Europe to Asia boosted stimulus. Data Wednesday indicated euro-area manufacturing expanded faster than forecast last month, while Chinese shares in Hong Kong advanced as a gauge of manufacturing unexpectedly rose.
The S&P 500 fell 0.9 percent on Tuesday, trimming its quarterly gain to 0.4 percent in a market that has tripled since 2009. The index trailed most developed markets in the first three months of the year, with Europe’s benchmark equity gauge surging 16 percent and Japan’s Topix index climbing 9.6 percent.
“Earnings estimates have come down quite a bit, but the stock market is near all-time highs,” said Matt Maley, an equity strategist at Miller Tabak & Co LLC in Newton, Massachusetts. “The employment report was certainly weaker, but earnings season comes very soon and the market has to come down as much as earnings have.”
Alcoa Inc. unofficially kicks off the earnings season when it reports results April 8. Analysts estimate first-quarter profits for S&P 500 companies will decline for the first time since 2009, according to data compiled by Bloomberg. They had projected earnings growth for the period as recently as January.
Health-care and industrial shares led declines in U.S. stocks Wednesday, with losses of more than 0.8 percent. Boeing Co. slid 1 percent, while Merck & Co. tumbled 1.1 percent.
A Bloomberg index of U.S. air carriers dropped 3.6 percent after ratings on Delta Air Lines Inc., United Continental Holdings Inc. and American Airlines Group Inc. were reduced to hold by Deutsche Bank AG analyst Michael Linenberg.
The Nasdaq Biotechnology Index fell 1 percent, as Regeneron Pharmaceuticals Inc. and Vertex Pharmaceuticals Inc. retreated at least 1.3 percent.
Yields on 10-year U.S. debt dropped for a fourth day as the ADP jobs data raised questions over momentum in the labor market, which has been the driver of the U.S. economic expansion that began in almost six years ago. Demand for Treasuries was also boosted by their relative value, given U.S. yields are now higher than 19 developed economies including the U.K., Norway and Spain.
Bloomberg’s dollar gauge, which tracks the U.S. currency against 10 major peers, completed its ninth straight month of gains in March, the longest rally in data going back to 2004. The dollar weakened 0.3 percent to $1.0763 per euro Wednesday after reaching $1.0458 on March 16, its strongest level since January 2003. It fell 0.3 percent to 119.76 yen.
The Stoxx Europe 600 rose 0.3 percent Wednesday after erasing a drop of as much as 0.5 percent after the manufacturing data from Markit Economics. The gauge rallied 16 percent in the first quarter, with carmakers leading gains, as the European Central Bank began a quantitative-easing program and economic data beat forecasts by the most in two years.
“Data in Europe keeps on surprising us, and stronger growth is precisely what will drive markets higher from here,” said Didier Duret, who oversees the equivalent of $177 million at ABN Amro Bank NV’s wealth-management unit. “The economic landscape will continue to improve as all the positive shocks from the first quarter -- the ECB, the low euro, and low oil prices -- start feeding into the recovery now.
A gauge of banks rose 0.9 percent, contributing the most to the Stoxx 600’s gains Tuesday. Barclays Plc climbed 2.8 percent.
The Stoxx 600 briefly erased almost all its gains after a report said Greece may seek to delay an April 9 deadline to repay loans to the International Monetary Fund. A Greek government official denied the report.
Thirty-year Greek bonds fell, with yields rising 25 basis points, or 0.25 percentage point, to 9.24 percent. Markets are too pessimistic on Greece and long-term investors should buy the securities, JPMorgan Chase & Co. strategists Nikolaos Panigirtzoglou and Aditya Chordia wrote in a in client note dated Tuesday.
Germany’s 10-year yields slipped one basis point to 0.17 percent, while U.K. gilts fell on Wednesday, sending 10-year yields down four basis points to 1.54 percent.
The MSCI Emerging Markets Index advanced for a third day, adding 0.9 percent, after capping the best first quarter since 2012. The Hang Seng China Enterprises Index of Chinese stocks listed in Hong Kong climbed 1.6 percent and the Shanghai Composite Index rose 1.7 percent to the highest close since March 2008.
West Texas Intermediate crude settled at $50.09 a barrel after government data showed that U.S. crude output fell from the highest level in more than three decades. Talks between world powers and Iran over the country’s nuclear program continued after a Tuesday deadline set by the group.
Brent crude, the benchmark contract for more than half of the world’s oil, added 3.6 percent to $57.10 a barrel in London.
Iron ore with 62 percent content at China’s Qingdao port, retreated 3.5 percent to a record-low $49.53 a dry ton on Wednesday, according to Metal Bulletin Ltd., as a surge in low-cost supplies from Australia and Brazil swamp the global market.