U.S. stocks fell, sending the Standard & Poor’s 500 Index to its lowest level in a month, as weaker-than-estimated data added to concerns about slowing growth before Friday’s government jobs report.
Apple Inc., Hewlett-Packard Co. and Microsoft Corp. dropped for a third session, weighing on technology shares. Alexion Pharmaceuticals Inc. tumbled 8 percent after agreeing to buy Synageva BioPharma Corp. for $8.4 billion, and Pfizer Inc. declined as health-care slumped. Devon Energy Corp. rose 1.3 percent after boosting its production forecast.
The S&P 500 Index fell 0.5 percent to 2,080.15 at 4 p.m. in New York. The gauge briefly dropped below its average price during the past 100 days. The Dow Jones Industrial Average declined 86.22 points, or 0.5 percent, to 17,841.98, almost erasing its 2015 gain. The Nasdaq Composite Index lost 0.4 percent, while the Russell 2000 Index increased 0.3 percent as biotechnology shares rose. About 7.3 billion shares traded hands on U.S. exchanges, 11 percent above the three-month average.
“The data this morning has people nervous, and after yesterday’s selloff, there are a lot of weak hands in the market,” said Robert Pavlik, who helps oversee $9 billion as chief investment strategist at Boston Private Wealth. “People are worried about what Friday’s report is going to bring. They’re not fully committed -- they’re just trying to ride the wave, and that’s caused some selling pressure to develop.”
Benchmark indexes dropped as much as 1 percent after Federal Reserve Chair Janet Yellen said equity market valuations are quite high and could be a potential source of financial instability, in remarks on a panel in Washington.
Investors have been listening intently to commentary from Fed policy makers and watching economic data for clues on the timing of future interest-rate increases.
Companies added 169,000 workers to payrolls in April, according to ADP Research Institute, below the 200,000 median forecast of economists surveyed by Bloomberg. Friday’s monthly government payrolls numbers are expected to rise 230,000, according to economists’ estimates, after a 126,000 gain in March.
A separate report today said productivity fell in the first quarter while labor costs increased, a dynamic that could weigh on corporate profits. Economic data this month have been missing estimates by the most in more than six years, stoking concerns the Fed may soon raise borrowing costs even as the economy slows.
The S&P 500 has fallen 1.8 percent from a record last month as mixed data added to worries on U.S. growth while concern rose that Greece won’t be able to resolve its debt crisis.
S&P 500 companies are beating earnings estimates and analysts are getting more optimistic. They project index members’ profit fell 0.4 percent in the first quarter, compared with 5.6 percent at the start of the earnings season. They still forecast quarterly declines through September.
The Chicago Board Options Exchange Volatility Index climbed 5.9 percent Wednesday to 15.15. The gauge, know as the VIX, posted its biggest two-day gain since January.
Eight of the S&P 500’s 10 main groups fell on the day, with financial, phone and technology companies the biggest decliners. Microsoft and Hewlett-Packard Co. slid at least 1.9 percent for their biggest drops in six weeks. Intel Corp. lost 1.3 percent after falling 2.4 percent yesterday.
Frontier Communications Corp. tumbled 12 percent after first-quarter profit and revenue missed estimates to lead a slide among phone companies.
Alexion Pharmaceuticals’ 8 percent retreat along with Pfizer’s 1.9 percent decline weighed the most on the health-care group. Meanwhile, the Nasdaq Biotechnology Index rose 0.9 percent, after falling 2 percent yesterday, as biotechs gained amid Alexion’s buyout of Synageva. Synageva surged 112 percent.
News Corp. lost 6.4 percent, pacing declines among consumer discretionary shares after reporting quarterly earnings that missed analysts’ estimates after print advertising continued to fall and currency swings ate into revenue. Shares fell the most since June 2013 when the company was split in two, separating from 21st Century Fox Inc.
Allstate Corp. declined 3.8 percent to a more than four-month low. The largest publicly traded U.S. seller of car and home insurance said it’s raising rates for drivers after profitability declined at its namesake auto unit.
Western Union Co. gained 4.3 percent to a four-year high, after a report, which the company denied, that it’s in talks to acquire smaller rival MoneyGram International Inc. MoneyGram rallied 21 percent.
Electronic Arts Inc. rose 3 percent to its highest level in more than seven years as fourth-quarter sales and earnings beat analysts’ forecasts.
Cablevision Systems Corp. jumped 2.2 percent to its highest level of 2015 after Chief Executive Jim Dolan said at a panel at the Internet & Television Expo that he wants a deal with Time Warner Cable Inc. Time Warner slipped 0.8 percent.