Disappointing manufacturing and employment data released on
Wednesday caused Wall Street traders to reassess their exposure
as the major averages sit near all-time highs.
The reports, along with some geopolitical uncertainty relating
to North Korea, dampened risk appetite on the session, sending
the Dow down triple digits. Crude oil and precious metals prices
also fell on the session despite a weaker U.S. dollar.
Although the investing climate remains very favorable, the
sell-off could be a sign of a further correction driven by profit
taking as both the Dow and S&P hit all-time highs on
The Dow Jones Industrial Average declined 112 points, or 0.76
percent, to close at 14,550.
The S&P 500 lost almost 17 points, or 1.05 percent, to
The Nasdaq fell 36 points, or 1.11 percent, to 3,219 on the
ADP Employment Change
ADP employment data showed that fewer jobs were created in
March than had been expected. This put a damper on investor risk
appetite on Wednesday, sending the major averages lower.
The data showed that only 158,000 jobs were created for the
month compared to expectations of a 197,000 job uptick. This was
down sharply from the prior month when 237,000 jobs were
The ISM non-manufacturing index fell in March to 54.4 from
56.0 in February. A number above 50 indicates expansion whereas a
number under 50 represents contraction. The data for last month
came in below consensus expectations which called for a drop to
Crude oil prices tumbled on Wednesday along with risk appetite
in general. Near the close of equities, NYMEX crude futures were
trading down 3 percent to $94.37. Brent crude oil was last down
3.20 percent to $107.32. Natural gas futures lost roughly 1.44
percent on the session to $3.90.
Precious metals prices also fell on the session along with
equities and most other commodities. COMEX gold futures had lost
1.19 percent to $1,556.40 while silver futures had shed a little
better than 1 percent to $26.93. Copper was last down more than
1.50 percent on Wednesday.
While most risk assets declined on the day, both corn and
wheat were higher. Corn futures were last up around 0.16 percent
while wheat prices jumped nearly 4 percent on the session. In
soft commodities, coffee added more than 2 percent while cocoa
prices lost around 1 percent.
Near the close of equity trading, the iShares Barclays 20+
Year Treasury Bond ETF (NYSE:
) had risen almost 1 percent to $119.06 on risk aversion. The
rise in prices pushed yields lower on the day.
The yield on the 2-Year Note declined by one basis point to
0.23 percent while the 5-Year yield lost five basis points to
0.72 percent. The 10-Year Note yield and 30-Year Bond yield both
declined by five basis points to 1.81 percent and 3.05 percent,
The U.S. dollar fell on Wednesday after weak economic data.
Near the close, the PowerShares DB US Dollar Index Bullish ETF
), which tracks the performance of the greenback versus a basket
of foreign currencies, was down 0.27 percent to $22.51.
The closely watched EUR/USD pair was last up 0.17 percent to
$1.2845. Other movers included the USD/JPY, which fell 0.55
percent, and the GBP/USD, which rose 0.25 percent.
Volatility and Volume
The VIX jumped on Wednesday as investors sold stocks. The
widely watched barometer of market fear surged 11.50 percent to
Volume was a little heavier than usual amid the sell-off.
Around 136 million SPDR S&P 500 ETF (NYSE:
) shares traded hands compared to a 3-month daily average of 124
NII Holdings (NASDAQ:
) surged more than 21 percent on Wednesday after reports surfaced
that Chilean phone company Entel is interested in purchasing
NII's Peruvian business unit for $500 million.
Online game-maker Zynga (NASDAQ:
) rose better than 15 percent after the company launched its
first real-money gambling titles in the United Kingdom.
) jumped more than 8 percent on Wednesday after the company
reported its fiscal fourth-quarter financial results and raised
its profit outlook.
Fifth & Pacific (NYSE:
) rose a little less than 8 percent on the session on a Wall
Street Journal report which suggested that the company may be
considering a sale of its Lucky Brand and Juicy Couture
Acuity Brands (NYSE:
) rose more than 5 percent on Wednesday after the company
released its fiscal second-quarter financial results.
) lost around 2 percent after the company's fiscal third-quarter
Global Payments (NYSE:
) fell more than 9 percent on the day after releasing
disappointing fiscal third-quarter earnings and revenue.
) gave back some recent gains on Wednesday as the company
unveiled its leasing program. The stock closed down more than 7
percent to $41.10.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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