By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks ended Wednesday's choppy
session lower as investors were unable to shrug off worries over
the economy.
A weaker-than-expected ADP jobs report and the ISM report on the
services side of the economy compounded fears that the U.S.
recovery is still vulnerable, weighing on sentiment. A widespread
notion that markets may have further to fall also kept indexes from
building on the previous day's modest gains.
Philadelphia Fed President Charles Plosser's comments urging to
speed up the tapering reminded investors that quantitative easing
is unlikely to come to aid the markets in 2014.
The S&P 500 (SPX) closed down 3.56 points, or 0.2% at
1,751.64 and is 5.2% below its peak reached on Jan 15.
The Dow Jones Industrial Average (DJI), which dropped more than
100 points at session lows, closed 5 points lower at 15,440.29.
The Nasdaq Composite (RIXF) ended the day 19.97 points, or 0.5%,
lower at 4,011.55.
Read the recap of our stock market live blog.
Earlier, stocks fell to session lows after the Institute for
Supply Management said U.S. service-sector companies expanded in
January at a slightly faster pace, a survey of executives found.
The employment gauge also ticked up, marking the highest level in
more than three years.
Stocks had opened lower after Automatic Data Processing Inc.
said private-sector-employment gains slowed down in January, with
employers adding 175,000 jobs, slightly less than expected, while
the December number was revised down to 227,000. The report comes
ahead of the official non-farm payrolls data due on Friday.
"Even though it was the emerging markets that triggered recent
selling, concerns have shifted to the U.S. economy and recent data
have been disappointing," said Nicholas Colas, chief market
strategist at ConvergEx Group, a global brokerage company based in
New York.
"Volatility has moved to 'old normal' levels, which means more
downturns in the near future as we are in the midst of a
correction," Colas said.
"Money outflows year-to-date have been quite big, as investors
withdrew $22.5 billion from all U.S.-listed ETFs, most of it from
the highly liquid SPDR S&P 500 ETF Trust (SPY). We had a big
rally last year and it is time to pay some of that back, which is
normal in the markets," he added.
Implied volatility on the S&P 500 as measured by the CBOE
Vix index rose to 19.7, which is close to the 30-year average.
In corporate news, Shares of C.H. Robinson Worldwide Inc.
(CHRWD) fell sharply after the company posted a 64% drop in
fourth-quarter profit on Tuesday, missing expectations.
CVS Caremark Corp. (CVS) shares fell after the drugstore chain
said Wednesday it would stop selling cigarettes and tobacco
products in stores by Oct. 1. CVS said the estimated $2 billion
drop in revenues would not affect 2014 per-share earnings.
Shares in Genworth Financial Inc. (GNW) rallied after the
company reported a 24% rise in fourth-quarter profit, beating
expectations.
Merck & Co. Inc.(MRK) shares rose after the company said it
entered three separate collaboration agreements with peers to
evaluate its investigational immunotherapy cancer treatment.
Earlier, the company announced a drop in fourth-quarter profit and
revenue missing expectations.
Shares in Tableau Software Inc. (DATA) and Myriad Genetics Inc.
(MYGN) soared after upbeat quarterly results late Tuesday.
Two biotechnology companies, which debut on the stock market
today, did not fare well. Genocea Biosciences Inc (GNCA) and
uniQure N.V. (QURE) both fell.
In other IPO news, Continental Building Products inc (CBPX)
jumped on debut.
In other markets, European stocks erased gains after the ADP
report. Stocks stabilized in Asia. Gold and oil prices moved
higher, while the dollar extended losses after a report on
private-sector employment showed a slower pace of growth than
expected.
More stories from MarketWatch:
Greenhaus: S&P pullback is 'normal' so far
8 stock indexes around the globe facing corrections
Volatility Index raises caution flag for market bears
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