Wednesday at the close of US stock market Dow Jones Industrial Average declined by 1.43%, The S&P 500 index fell by 1.38% and high-tech benchmark Nasdaq Composite lost 1.27%.
The reason for the plunge is pointed to be data of private sector jobs report viewed as a sign of the official unemployment report which is to be posted on Friday. Investors begin to worry about an imminent reduction of government bond buying program happening this summer considering mixed signals of Fed officials. The stimulus that has been lowering interest rates and flooding economy, has also boosted stock prices to record levels.
The ADP employment change showed non-farm payrolls raised to 135 000 missing expectations of 165 000.
According to traders the drop in stocks on Wednesday wasnt related with any of the economic news. Instead it was a result of adding up things recent months. They call it “buyers retreat” as the people are not hurrying to buy stock. Instead they are waiting for more signals from the Fed.
Mr. Tuz said his firm is bullish on health-care and technology shares, but given the recent volatility in stocks, its funds have been holding slightly more cash than usual. “Theres no real rush to go reinvest our money,” he said for The Wall Street Journal.
In corporate news, most of the stock closed recording losses. The leading performers of Dow Jones Industrial Average declined – Cisco Systems fell 0.16%, Johnson & Johnson is down 0.48%, and Pfizer 0.58%. The worst among them were Intel, Alcoa and Dupont, all three plunging by more than 2% share price.
European benchmark indexes also declined recording even bigger percentage losses. Euro Stoxx fell by 1.68%, CAC 40 lost 1.87%, DAX 30 reduced 1.2% its price and FTSE 100 plunged by 2.12%.
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