© Reuters. Traders work on the floor at the NYSE in New York
By Medha Singh and Arjun Panchadar
(Reuters) – Wall Street’s main indexes were on course for their sharpest drop in nearly six weeks on Wednesday as a clutch of recent data, including a report on private sector hiring, suggested that trade tensions were taking a toll on the U.S. economy.
All the 11 major S&P sectors were in the red, with technology shares () taking the biggest hit after tumbling 2.4%. Sectors, including industrial (), materials (), energy () and financials (), also shed more than 2%.
The ADP (NASDAQ:) National Employment Report showed private payrolls growth in August was not as strong as previously estimated, and said “businesses have turned more cautious in their hiring,” with small enterprises becoming “especially hesitant.”
The report comes a day after U.S. factory activity contracted to its lowest level in more than a decade, triggering sharp falls in U.S. stocks indexes.
The recent set of weak data has shaken investor faith in the strength of the domestic economy, which had shown relative resilience in the face of slowing global growth and was a key reason for a rally in the benchmark index this year.
“People have been anticipating a bear market for years and they are very anxious and so any number like the ADP number is amplified in the volatility on the downside,” said Tom Plumb, chief investment officer at Plumb Funds in Madison, Wisconsin.
The focus is now on the Labor Department’s more comprehensive jobs report due on Friday for further clues on the health of the U.S. economy.
“The hardest part to figure out is whether trade and the business recession will impact consumer confidence and that leads to a very different scenario,” said Phil Blancato, chief executive officer of Ladenburg Thalmann Asset Management in New York. “So far it hasn’t happened … the consumer has held up.”
The S&P 500 () and the Dow () slipped below their 100-day moving averages for the first time in about a month on Wednesday, seen as a strong technical support level that could presage further losses.
Graphic: Wall Street’s main indexes hit 1-month lows – https://fingfx.thomsonreuters.com/gfx/buzzifr/14/7661/7661/SPX.png
The benchmark index is now about 5% below its all-time high hit in July, after coming within striking distance of the mark two weeks ago.
At 13:02 ET (1702 GMT), the Dow Jones Industrial Average () was down 563.16 points, or 2.12%, at 26,009.88 and the S&P 500 () was down 61.04 points, or 2.08%, at 2,879.21. The Nasdaq Composite () was down 152.02 points, or 1.92%, at 7,756.66.
The Cboe Volatility Index, or VIX (), an options-based gauge of investor anxiety, rose 2.50 points to 21.06, its highest in about a month.
Activision Blizzard Inc (O:) dropped 3.3% after Bernstein downgraded the videogame maker’s shares to “market perform”.
Ford Motor Co (N:) shares fell 4.3% after the carmaker reported a fall of about 5% in U.S. auto sales for the third quarter. Shares of General Motors Co (N:) dipped 4.3% ahead of its quarterly auto sales report.
Among bright spots, homebuilder Lennar Corp (N:) rose 2.4% after the company reported a better-than-expected profit as cheaper mortgage rates led to higher demand for its homes.
Johnson & Johnson (N:) gained 1.2% after the drugmaker said it will pay $ 20.4 million to settle claims by two Ohio counties, allowing it to avoid an upcoming federal trial seeking to hold the industry responsible for the nation’s opioid epidemic.
Declining issues outnumbered advancers for a 4.61-to-1 ratio on the NYSE and a 3.22-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 12 new lows, while the Nasdaq recorded four new highs and 167 new lows.
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