Stocks lower; materials, industrials lag

U.S. stocks came off lows Wednesday after services data topped expectations.

“I think you start paying attention to the progress in the economy. This is second-quarter data,” said Art Hogan, chief market strategist at Wunderlich Securities, noting the mid-morning data was “good news.”.

The Dow Jones industrial average traded about 50 points lower after earlier falling more than 100 points in morning trade. Chevron was among the top contributors to gains, while Goldman Sachs was among those with the greatest negative impact.

ISM non-manufacturing for April was 55.7, above expectations and rising from March’s 54.5 print.

The final April read on Markit services PMI rose to 52.8 from 51.3 in March.

Factory orders rose a more-than-expected 1.1 percent in March.

Barclays’s first-quarter GDP tracking estimate rose to 0.9 percent after the factory orders report.

Treasury yields came off lows to trade mostly higher. The U.S. dollar index extended gains.

U.S. crude oil futures pared gains. Weekly EIA crude inventories showed a rise of 2.8 million barrels.

Energy turned lower after earlier leading S&P advancers.

Ahead of the highly anticipated nonfarm payrolls report due Friday, theADP employment report for April missed expectations with a decline from the prior month to 156,000.

“ADP shows the job market has cooled off,” said Peter Cardillo, chief market economist at First Standard Financial.

“That could mean one of the significant pillars of the economy is beginning to weaken,” he said.

Read More: Packed calendar ahead for US markets

The March trade deficit was $40.4 billion. First quarter productivity declined at an annual rate of 1 percent.

Treasury yields were mixed. The 10-year yield was near 1.80 percent and the 2-year yield was around 0.75 percent after briefly falling to its lowest in more than two weeks.

The U.S. dollar index traded mildly higher, with the euro near $1.151 and the yen at 106.66 yen against the greenback as of 9:53 a.m. ET.

Weekly mortgage application volume fell 3.4 percent, according to the Mortgage Bankers Association.

Symbol
Name
Price
Change
%Change
DJIA Dow Jones Industrial Average 17691.57
-59.34 -0.33%
S&P 500 S&P 500 Index 2053.52
-9.85 -0.48%
NASDAQ Nasdaq Composite Index 4740.28
-22.94 -0.48%

Overseas, European stocks traded about half a percent lower or more. Asian equities ended lower, with the Shanghai composite off only 0.05 percent. Japanese markets remained closed for a holiday.

Read More: Early movers: TWX, PCLN, ENR, GNRC, KSS, CBS, FCAU, Z & more

In mid-morning trade the Dow Jones industrial average declined 72 points, or 0.4 percent, to 17,680, with United Technologies leading decliners and McDonald’s the top gainer.

The S&P 500 fell 11 points, or 0.53 percent, to 2,052, with materials and industrials leading eight sectors lower and utilities and consumer staples the only advancers.

The Nasdaq composite declined 27 points, or 0.57 percent, to 4,735.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded higher near 16.3.

About three stocks declined for every two advancers on the New York Stock Exchange, with an exchange volume of 249 million and a composite volume of nearly 1.1 billion.

U.S. crude oil futures for June delivery rose 31 cents to $43.96 a barrel on the New York Mercantile Exchange.

Gold futures for June delivery fell $6.70 to $1,285.10 an ounce as of 10:51 a.m. ET.

On tap this week:

Wednesday

Earnings: AB InBev, Priceline, Royal Dutch Shell, Siemens, Time Warner, Humana, IntercontinentalExchange, Zoetis, Cedar Fair, Kate Spade, Shopify, Shutterstock, Virtu Financial, Wix.com, 21st Century Fox, MetLife, Allstate, Fitbit, Kraft Heinz, Murphy Oil, Tesla Motors, Transocean, Whole Foods, Eldorado Gold, GoDaddy, Weight Watchers, Yamana Gold, Zynga

6:30 p.m. Minneapolis Fed President Neel Kashkari

Thursday

Earnings: Alibaba, Merck, Chesapeake Energy, Discovery Communications, Kellogg, Regeneron, MGM Resorts, Scripps Networks Interactive, AMC Networks, Avon Products, Fortress Investment, SeaWorld, Time, Activision Blizzard, Cerner, Motorola Solutions, News Corp., Square, Tableau Software, Dreamworks Animation, El Pollo Loco, FireEye, Herbalife, TrueCar, Wingstop, Yelp

7:30 a.m.: Challenger Job-Cut report

8:30 a.m. Initial claims

10:30 a.m.: Natural gas inventories

11:50 a.m. St. Louis Fed President James Bullard

7:15 p.m. Atlanta Fed’s Lockhart, Dallas Fed President Rob Kaplan, St. Louis Fed’s Bullard, San Francisco Fed’s Williams at Hoover Conference

Friday

Earnings: ArcelorMittal, Cigna, Willis Towers Watson, Madison Square Garden, Berkshire Hathaway

8:30 a.m. Employment report

1 p.m.: Oil rig count

3 p.m.: Consumer credit

*Planner subject to change.

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