Stocks fall on signs of weak economy

Traders work on the floor of the New Traders work on the floor of the New York Stock Exchange at the end of the trading day on Tuesday. The Dow Jones industrial average and the S&P 500 rose to record highs on April 2, with the Dow finishing at a record close of 14,662. (April 2, 2013) Photo Credit: Getty Images

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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 to 14,550.35, its worst decline since Feb. 25. The Standard & Poor's 500 index dropped 1.05 percent to 1,553.69. Both indexes closed at record highs the day before. The Nasdaq composite fell 1.11 percent to 3,218.60.

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U.S. service companies kept growing at a solid pace in March, but the expansion was less than economists expected. The Institute for Supply Management's index of service companies fell to 54.4 from 56 a month earlier. The report was the weakest in seven months.

Separately, payrolls processor ADP reported that U.S. employers added 158,000 jobs last month, down from February's gain of 237,000. The ADP report is often seen as a preview for the government's broader survey on employment, which is due out Friday.

The slowdown in hiring was due in part to construction firms holding back on adding new employees.

"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." -- AP

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