By Anora Mahmudova and Sara Sjolin, MarketWatch
Technology stocks sell off
U.S. stocks erased opening gains and edged lower on Wednesday,
building on steep losses from the previous session, as Federal
Reserve Chairwoman Janet Yellen remarked that stock values are high
at an event in the morning.
Traders already had been fretting after a lower-than-forecast
ADP employment raised nervousness among investors ahead of the more
closely followed nonfarm payrolls report slated for Friday.
Implied volatility on the S&P 500, as measured by the CBOE
Volatility index -- a measure of investor nervousness--jumped above
15, suggesting investors are getting jittery.
The S&P 500(SPX) fell 10 points, or 0.5%, to 2,079 with nine
of its 10 main sectors trading lower. The energy sector was the
only bright spot following a jump in oil prices. Technology stocks
continued to pull back.
The Dow Jones Industrial Average(DJI) is down more than 100
points, or 0.6%, to 17,814. The Nasdaq Composite(RIXF) lost 24
points, or 0.5%, to 4,916.
Yellen's comments came at a panel discussion Wednesday
(http://www.marketwatch.com/story/yellen-sees-dangers-in-quite-high-stock-valuations-2015-05-06)
with the head of the International Monetary Fund, Christine Lagarde
and didn't help lift investors' spirits.
Investors had been digesting a report, released before U.S.
stocks opened for trading, which showed the pace of hiring in the
private sector slowed in April. Meanwhile, productivity slumped for
the second quarter in a row. Some economists dismiss the ADP report
as it has little predictive power for the official nonfarm payrolls
due on Friday.
Data: The U.S. created 169,000 private-sector jobs in April,
payrolls processor ADP said, after a downwardly revised 175,000
jobs were created in March, well below the consensus estimate. A
slowing pace of job gains may prompt the Federal Reserve officials
to delay raising interest rates after the June meeting.
U.S. productivity in the first quarter fell by a 1.9% annual
pace, resulting in the first back-to-back drop since 2006. The
decline in productivity stemmed from companies hiring more workers
and employees working longer hours even as production of goods and
services declined.
Earnings:Wendy's Co.(WEN) released first-quarter adjusted
earnings per share that slightly beat consensus, but revenue missed
forecasts. Still, shares jumped 4.9%.
SodaStream International Ltd.'s(SODA) first-quarter earnings met
FactSet consensus estimates, but revenue came short of forecasts.
Shares fell 5.8%.
Shares of Herbalife Ltd.(HLF) climbed 16% after the
nutrition-supplement maker late Tuesday raised its outlook for the
year
(http://www.marketwatch.com/story/herbalife-raises-guidance-as-earnings-grow-48-2015-05-05-174852122)
as earnings rose a stronger-than-expected 4.8% in the first
quarter.
Internet stocks were taking a beating on Wednesday. Twitter,
Inc., LinkedIn Corp and Yelp Inc. were down more than 1.6%.
Groupon Inc.(GRPN) dropped 4.8% after the online deal company on
Tuesday said its first-quarter loss narrowed
(http://www.marketwatch.com/story/groupon-adjusted-profit-sales-in-line-with-views-2015-05-05).
Shares of Synageva BioPharma Corp.(GEVA) soared 114% after news
Alexion Pharmaceuticals Inc. (ALXN) will buy the biotech firm in a
cash-and-stock deal valued at $8.4 billion
(http://www.marketwatch.com/story/alexion-to-buy-synageva-in-84-billion-biotech-deal-2015-05-06).
Alexion shares lost 8.5%.
For more on today's notable movers read Movers & Shakers
column
(http://www.marketwatch.com/story/sodastream-tesla-keurig-green-mountain-earnings-in-focus-2015-05-06).
Other markets:Asian markets
(http://www.marketwatch.com/storyno-meta-for-guid) closed lower,
while European stocks
(http://www.marketwatch.com/storyno-meta-for-guid) were mostly
higher.
Crude oil (CLM5) moved briefly above $62 a barrel for the first
time since December
(http://www.marketwatch.com/storyno-meta-for-guid), while gold
prices erased losses and were flat. The dollar (DXY) was pushing
lower against other major currencies, particularly the euro which
broke $1.13 against the buck.
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