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Last Updated : Jun 01, 2011 11:12 PM IST | Source: Reuters

Wall St falters after weak economic data

US stocks fell on Wednesday as another round of weak economic data cast doubts on the strength of an economic recovery.


US stocks fell on Wednesday as another round of weak economic data cast doubts on the strength of an economic recovery.


The S&P was off more than 1 percent after climbing in the four prior sessions. The gains came even as data showed a decline in growth in the second quarter, a trend supported by Wednesday's private employment and factory activity reports.


US private employers added a scant 38,000 jobs in May, the lowest level since September 2010, according to ADP Employer Services data.


The Institute for Supply Management's index of national factory activity fell to 53.5 in May -- its worst since September 2009 -- from 60.4 the month before.


"There's clearly a debate going on within the market as to how much the slowdown that we're seeing is temporary, related to the situation in Japan and the supply chain disruptions, and how much of it is more fundamental slowing," said Keith Hembre, chief economist at First American Funds in Minneapolis.


"The data flow has been universally negative for the last few weeks ... but it is appropriate to keep in mind that a (reading above 50) is still consistent with moderate growth in manufacturing."


The Dow Jones industrial average dropped 157.57 points, or 1.25 percent, to 12,412.22. The Standard & Poor's 500 Index slid 16.44 points, or 1.22%, to 1,328.76. The Nasdaq Composite Index fell 24.17 points, or 0.85%, to 2,811.13.


Bank stocks were among the worst performers, with JPMorgan Chase & Co off nearly 3% to USD 42, and US Bancorp down 2.7% to USD 24.92. The KBW bank index dropped nearly 3%.


Macy's Inc dipped 1.1% to USD 28.55 after the department store operator posted a 7.4% increase in May same-store stores, beating expectations.


Sealed Air Corp lost 4.8% to USD 24.33 after the bubble wrap maker agreed to buy private cleaning products maker Diversey Holdings for USD 2.9 billion in cash and stock.


Marathon Oil Corp dropped 2.8% to USD 52.71 after the integrated oil company made a deal to acquire oil and gas properties in Texas' Eagle Ford shale field from private equity firm KKR and Hilcorp Resources Holdings LP for USD 3.5 billion.



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First Published on Jun 1, 2011 09:17 pm
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