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Equities and energy futures took a thrashing on Wednesday after disappointing data on the U.S. economy, combined with hawkish commentary from a Fed official, spooked traders.
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As of 3:36 p.m. ET, the Dow Jones Industrial Average fell 129 points, or 0.88%, to 14534, the S&P 500 slumped 20 points, or 1.3%, to 1551 and the Nasdaq Composite dropped 42.7 points, or 1.7%, to 3212.
The Dow and broader S&P 500 both logged fresh closing higher on Tuesday as the 2013 rally rolled into the second quarter. However, sentiment was much more sour on Wednesday.
Every major sector was in the red, with energy, financials, consumer staples and materials taking the biggest beating. Utilities posted the most mild losses.
Selling picked up late in the day after Dow Jones Newswires quoted San Francisco Federal Reserve President John Williams as saying the central bank may begin trimming its vast bond-buying program, dubbed quantitative easing, this summer, and completely end it this year.
Oil and gasoline futures came under heavy selling pressure after a report showed crude inventories rising last week to the highest level in more than two decades -- a sign demand may be waning. The benchmark U.S. crude oil contract slid $1.51, or 1.5%, to $95.68 a barrel. Wholesale New York Harbor gasoline plunged 2.6% to $2.9622 a gallon. In metals, gold fell $3.10, or 0.2%, to $1,573 a troy ounce.
ADP, ISM Data Disappoint
The focus is shifting back to the U.S. labor market. he ADP National Employment Report shows the U.S. private sector added 158,000 jobs in March, missing estimates of an increase of 200,000 jobs. February’s gain of 198,000 jobs was revised up by 39,000 to 237,000.
The report "will keep the bulls from boosting their payroll estimates between now and Friday," Steven Ricchiuto, chief economist at Mizuho Securities USA wrote in an email.
The all-important monthly jobs report from the Labor Department is on tap for Friday. The report is considered to be one of the best gauges of the overall economy and is very closely watched by the Federal Reserve. Indeed, signs of quicker, or slower, improvement could shift when the central bank begins paring back quantitative easing.
Meanwhile, the Institute for Supply Management reports its service-sector index fell to 54.4 last month from 56 in February, falling short of economists' forecasts for 55.8, and is the weakest reading since August. Readings above 50 point to expansion, while those below indicate contraction.
The Euro Stoxx 50 fell 0.76% to 2660, the English FTSE 100 dipped 0.46% to 6461 and the German DAX slipped 0.21% to 7927.
In Asia, the Japanese Nikkei 225 surged 3% to 12262 and the Chinese Hang Seng edged lower by 0.14% to 22337.