Weak Economic Data Thrashes Stocks
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(Update) Stocks started weaker Wednesday and continued to sell-off after a deluge of negative economic data points weighed heavily on investor confidence.
The Dow closed down 280 points to 12,290, Nasdaq fell 66 and the S&P 500 fell 31. Wednesday's easily erased Tuesday's gains.
Data on the jobs front continued to paint a dire picture. The ADP report showed private sector employment rose just 38,000 last month, well below the 175,000 economists had predicted. The data has already prompted economists to lower estimates on Friday’s important non-farm payrolls number: Goldman Sachs slashed its non-farm jobs estimate from 150,000 to 100,000, Citi cut its estimate by 70,000 to 100,000 and Deutsche Bank lowered its forecast from 225,000 to 160,000.
In addition to jobs, manufacturing data was also weak. The ISM manufacturing index was reported at 53.5, below the consensus of 57.1 and down from a reading of 60.4 during the month of April.
Wednesday's reports following weak housing and consumer confidence numbers on Tuesday.
Illustrating investors increased nervousness, the VIX surged 18.5%. The Ten Year Note fell below psychologically 3% level to end at 2.966%.
After trading much higher earlier in the session, Gold gave up much of its early gains and settled up $6.50 to $1542.40. Silver fell $0.61 to $37.694.
Crude settled at 100.29, down $2.41.
The Dow closed down 280 points to 12,290, Nasdaq fell 66 and the S&P 500 fell 31. Wednesday's easily erased Tuesday's gains.
Data on the jobs front continued to paint a dire picture. The ADP report showed private sector employment rose just 38,000 last month, well below the 175,000 economists had predicted. The data has already prompted economists to lower estimates on Friday’s important non-farm payrolls number: Goldman Sachs slashed its non-farm jobs estimate from 150,000 to 100,000, Citi cut its estimate by 70,000 to 100,000 and Deutsche Bank lowered its forecast from 225,000 to 160,000.
In addition to jobs, manufacturing data was also weak. The ISM manufacturing index was reported at 53.5, below the consensus of 57.1 and down from a reading of 60.4 during the month of April.
Wednesday's reports following weak housing and consumer confidence numbers on Tuesday.
Illustrating investors increased nervousness, the VIX surged 18.5%. The Ten Year Note fell below psychologically 3% level to end at 2.966%.
After trading much higher earlier in the session, Gold gave up much of its early gains and settled up $6.50 to $1542.40. Silver fell $0.61 to $37.694.
Crude settled at 100.29, down $2.41.
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