Weak economic reports send stock market lower
NEW YORK -- Weak reports on hiring and service industries sent the stock market sharply lower Wednesday, giving the Dow Jones industrial average its worst day in more than a month.
The Dow fell 111.66 points, or 0.8 percent, to 14,550.35, its worst decline since Feb. 25. The Standard & Poor's 500 index dropped 16.56 points, or 1.1 percent, to 1,553.69. Both indexes closed at record highs the day before.
The stock market started 2013 with a rally as investors became more optimistic about the U.S. economy, especially housing and jobs. The reports Wednesday disappointed the market and came two days after news that U.S. manufacturing growth slowed unexpectedly last month.
The losses were widespread. All 10 industry groups in the S&P 500 index fell. Banks and energy stocks had the worst losses, 1.7 percent and 1.6 percent. Utilities, which investors hold when they want to play it safe, fell the least, 0.3 percent.
"The market is overdue for a correction," said Joe Saluzzi at Themis Trading. "I don't think that the economy supports this type of a rally."
Signs of investor skittishness appeared across a number of different markets.
Commodities slumped. Crude oil dropped $2.74, or 2.8 percent, to close at $94.45 a barrel and industrial metals like copper fell.
The yield on the 10-year Treasury note fell to 1.81 percent from 1.86 percent, the lowest level for the benchmark rate since January. The decline means investors are moving money into low-risk U.S. government debt.
The Russell 2000 index, which tracks small company stocks, fell for a third straight day, dropping 1.7 percent. It's now down 3.5 percent so far this week, far worse than the declines in the Dow, 0.2 percent, and the S&P, 1 percent. That's another signal that investors may be becoming more bearish about the U.S. economy.