U.S. stocks fell, after a ninth straight quarterly gain, as weaker-than-estimated data on hiring and manufacturing reinforced concern that economic growth may be slowing.
Health-care and industrial companies led declines for a second day. American Airlines Group Inc. and Delta Air Lines Inc. slumped more than 3.7 percent after Deutsche Bank cut its ratings on the shares amid concerns about their international business. Wal-Mart Stores Inc. and Johnson & Johnson slipped at least 1.4 percent. Phone and energy companies rallied.
The Standard & Poor’s 500 Index lost 0.4 percent to 2,059.69 at 4 p.m. in New York. The gauge fluctuated Wednesday near its average price for the past 100 days. The Dow Jones Industrial Average slid 77.94 points, or 0.4 percent, to 17,698.18. The Nasdaq Composite Index declined 0.4 percent. About 7 billion shares changed hands on U.S. exchanges, 8 percent above the three-month average.
“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 in no-man’s-land as we start earnings.”
Alcoa Inc. unofficially kicks off the earnings season when it reports results on April 8. Analysts estimate first-quarter profits for S&P 500 companies will decline for the first time since 2009. They had projected earnings growth for the period as recently as January.
Companies added 189,000 workers to payrolls in March, figures from ADP Research Institute showed, fewer than the 225,000 economists surveyed by Bloomberg forecast. The data comes before the Labor Department’s report Friday in which economists predict nonfarm payrolls rose 245,000 last month with no change to February’s 5.5 percent unemployment rate.
A separate report showed factories expanded in March at the slowest pace since May 2013, a sign struggling overseas economies and cutbacks among oil producers are hindering U.S. manufacturing. The Institute for Supply Management’s index declined to 51.5 from 52.9 a month earlier.
The S&P 500 fell 0.9 percent on Tuesday in New York, trimming a ninth quarterly advance in a market that has tripled since 2009. The index’s 0.4 percent three-month gain trailed most developed markets, with Europe’s benchmark gauge surging 16 percent and Japan’s Topix index climbing 9.6 percent.
Nasdaq Composite Index posted its longest quarterly winning streak ever, boosted by biotech stocks. The Nasdaq Biotechnology Index rallied 13 percent and also posted a nine-quarter winning streak, its longest since 2000.
Five of the S&P 500’s 10 main groups fell Wednesday, led for a second day by health-care and industrial companies. The Chicago Board Options Exchange Volatility Index declined 1.2 percent to 15.11. The gauge, know as the VIX, marked its biggest quarterly decline in two years, down 20 percent.
A Bloomberg index of U.S. airlines dropped 3.6 percent, the most since Jan. 30, after Delta Air, United Continental Holdings Co. and American Airlines were cut to hold by Deutsche Bank analyst Michael Linenberg. A strong dollar, capacity increases by non-U.S. airlines and slowing global growth contributed to the downgrade decision.
The Nasdaq Biotech index dropped 1 percent, as Regeneron Pharmaceuticals Inc. and Alexion Pharmaceuticals Inc. retreated more than 2.1 percent. The measure has surged 149 percent since the start of 2013. It’s lost 7.2 percent since reaching a record on March 20.
Universal Health Services Inc. slid 4 percent, leading S&P 500 health-care companies lower, after Sterne Agee cut its rating amid concerns about impending regulatory risks. Express Scripts Holding Co. and AbbVie Inc. fell at least 2.4 percent.
General Motors Co. declined 2 percent to its lowest level in seven weeks after March sales fell below analysts’ estimates. Sales dropped 2.4 percent as a 14 percent gain in trucks and SUVs couldn’t overcome a 21 percent decline in cars.
Wal-Mart slumped 1.9 percent, leading the Dow lower after executives said in a presentation that they expect to be in heavy investment mode for the next 18 to 24 months as the company improves the way it handles inventory and outfits more locations with in-store pickup for online orders.
Energy companies in the S&P 500 added 0.2 percent. The group has climbed 4 percent since a two-month low on March 13. Oil advanced 5.2 percent, the most in two months, after a government report showed U.S. crude production declined from the highest level in more than three decades. Newfield Exploration Co. added 2.9 percent, and Devon Energy Corp. advanced 2.1 percent.
Phone companies in the benchmark index rose 0.8 percent as Windstream Holdings Inc. and Frontier Communications Corp. rallied more than 3.4 percent.
GoDaddy Inc. gained in its trading debut, after the company raised $460 million in a larger-than-expected initial public offering. Shares of the 18-year-old company, which provides Internet domain-name registration and hosting services, rose 31 percent.
Monsanto Co. climbed 3.9 percent, the most since June, after the world’s largest seed company reported that plantings of its newest genetically modified soybeans jumped fivefold in 2015 and will double next year. That outweighed concerns on the impact of a stronger dollar on foreign sales and a smaller corn crop this year.
Futures on the S&P 500, Dow and Nasdaq 100 Index bounced back from a rapid plunge earlier. At about 9:55 a.m. in Tokyo, S&P 500 E-mini contracts tumbled by as much as 1.3 percent over a two-minute period before rebounding.
The sudden drop in futures may have been triggered after the contract failed to close above a key support level, according to Andy Dodd, a technical analyst and sales trader with Louis Capital Markets. Support refers to an area on a chart where orders may be clustered. The contract tumbled to 2,060.75 on Tuesday, below its 50-day moving average of 2,061.
“Someone may have tried to sell a position or was stopped out and there was simply not enough liquidity due to the time of day,” Dodd said. “The long-term uptrend is around that 2,030.75 support level so no surprise it rallied off there.”