Disappointing Economic Data Weighing On Wall Street - U.S. Commentary

(RTTNews) - Following the notable pullback seen in the previous session, stocks have seen some further downside in early trading on Wednesday. The major averages have slid firmly into negative territory, more than offsetting Monday's rally.

In recent trading, the major averages have climbed off their lows for the young session, but they remain stuck in the red. The Dow is down 143.23 points or 0.8 percent at 17,632.89, the Nasdaq is down 45.08 points or 0.9 percent at 4,855.80 and the S&P 500 is down 14.04 points or 0.7 percent at 2,053.85.

The early weakness on Wall Street is partly due to the release of some disappointing economic data, including a report from payroll processor ADP showing a continued slowdown in the pace of private sector job growth in the month of March.

ADP said private sector employment climbed by 189,000 jobs in March following a slightly upwardly revised increase of 214,000 jobs in February. Economists had expected an increase of about 230,000 jobs.

With the continued slowdown, the pace of private sector job growth came in below 200,000 for the first time since January of last year.

Mark Zandi, chief economist of Moody's Analytics, said, "Job growth took a step back in March. The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market."

A separate report from the Institute for Supply Management showed that the pace of growth in manufacturing activity slowed by more than anticipated.

The ISM said its purchasing managers index dropped by 1.4 points to 51.5 in March after edging down 0.6 points to 52.9 in February.

While a reading above 50 indicates continued growth in manufacturing activity, economists had expected the index to show a more modest drop to 52.5.

Biotechnology stocks have shown a significant move to the downside in early trading, dragging the NYSE Arca Biotechnology Index down by 2.6 percent. Incyte (INCY) and BioMarin (BMRN) are posting notable losses.

Health care, airline, and trucking stocks are also seeing considerable weakness, while gold stocks have moved sharply higher on the day.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan's Nikkei 225 Index dropped by 0.9 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent.

Meanwhile, the major European markets are all seeing modest strength on the day. While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is up by 0.4 percent and U.K.'s FTSE 100 Index is up by 0.6 percent.

In the bond market, treasuries have moved notably higher on the heels of the disappointing economic data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.6 basis points at 1.868 percent.