AMTD TD Ameritrade Holding Corporation

By Mark DeCambre, MarketWatch , Andrea Riquier

Dow and S&P 500 both now below 100-day moving averages

U.S. stocks continued their slide Wednesday morning after a reading of private-sector employment affirmed that hiring was slowing and after a decision by the World Trade Organization allowing the U.S. to pursue additional tariffs on European goods.

What did major indexes do?

The Dow Jones Industrial Average slid more than 450 points, or 1.7%, touching 26,117, while the S&P 500 index fell about 47 points or 1.6%, at 2,893. The Nasdaq fell 117 points, 1.5%, to 7,792.

The Dow and S&P 500 have now both broken below their 100-day moving averages.

On Tuesday, the Dow lost 344 points, or 1.3%, to finish 26,573.04, the S&P 500 fell 37 points, or 1.2%, to end at 2,940.25. The Nasdaq Composite Index retreated 91 points, or 1.1%, to close at 7,908.68. The small-capitalization Russell 2000 index saw a steeper drop, losing 1.9% to 1,493.43. The S&P 500 closed below its 50-day moving average for the first time since Sept. 4.

What's driving the market?

A private-sector employment report (http://www.marketwatch.com/story/adp-says-135000-private-sector-jobs-created-in-september-as-hiring-continues-to-slow-2019-10-02) from Automatic Data Processing showed that a modest 135,000 jobs were created in September, another sign that hiring is slowing along with the broader U.S. economy. That missed the Econoday consensus forecast of 152,000 jobs. The average monthly job growth for the past three months also fell to 145,000 from 214,000 for the same time period last year.

"It's very simple. Everyone smells a weakening economy," said Steve Blitz, chief U.S. economist for TS Lombard. "The ISM data (http://www.marketwatch.com/story/slumping-us-manufacturers-experience-worse-month-since-end-of-great-recession-ism-finds-2019-10-01) spooked them, the construction data (http://www.marketwatch.com/story/construction-spending-up-01-in-august-after-revised-flat-reading-in-july-2019-10-01) sucked and everyone realizes the economy is slowing down. There's nothing that says recession yet but everyone's looking around the corner."

Market participants are hoping the Federal Reserve will further lower interest rates when it meets in October, but the Fed may be reluctant to cut again with rates not far from zero, Blitz said. "All you hear about from the Fed is how they don't have a lot of basis points to give away so they have to be careful and do maximum effect."

But if economic data continues to disappoint, "the data might force their hands," Blitz told MarketWatch.

The ADP payrolls report is published ahead of the more closely followed U.S. Labor Department's nonfarm-payroll report due on Friday.

Later Wednesday morning, the World Trade Organization ruled in favor of the U.S. in its pursuit of additional tariffs against E.U. goods (https://www.cnbc.com/2019/10/02/wto-rules-in-favor-of-us-in-aircraft-subsidies-dispute.html) over what the Trump administration says is illegal subsidies granted to Airbus. As much as $7.5 billion of imports could be subject to fresh tariffs.

The U.S. and China are due to resume talks next week on resolving the trade dispute between the world's two largest economies.

In other data, the U.S. Energy Information Administration (http://www.marketwatch.com/story/eia-reports-a-third-straight-weekly-rise-in-us-crude-oil-supplies-2019-10-02) said U.S. crude oil inventories were up 3.1 million barrels compared to last week, marking the third-straight weekly increase, another signal of a slowing economy as demand slackens.

Which stocks are in focus?

Johnson & Johnson(JNJ) shares rose nearly 3% after the company cut a deal to avoid an upcoming opioid litigation trial.

Shares of pharmaceutical company Savara Inc.(SVRA) tumbled 47% in morning trading after the company said the U.S. Food and Drug Administration had found its application for a new medication insufficient.

Discount-broker stocks continued to fall after the Tuesday announcement by Charles Schwab Corp.(SCHW) that it would cut most trading commissions to zero (http://www.marketwatch.com/story/can-it-get-any-cheaper-to-be-an-investor-2019-10-01). TD Ameritrade Holdings Corp.(AMTD) lost 3% in early-morning trading.

Ford (F) fell after the automaker reported third-quarter vehicle sales fell 4.9% (http://www.marketwatch.com/story/ford-third-quarter-vehicle-sales-fall-as-declines-in-suv-and-car-sales-offset-truck-sales-growth-2019-10-02) from a year ago to 580,251 vehicles, as a 10.5% drop in sport-utility vehicle (SUV) sales and a 29.5% tumble in car sales offset an 8.8% rise in truck sales. General Motors (GM) also fell after reporting poor quarterly sales (http://www.marketwatch.com/story/gm-stock-falls-nearly-4-after-companys-q3-sales-2019-10-02-1191122).

Boeing (BA) was lower after a report (http://www.marketwatch.com/story/boeing-shares-slide-13-on-report-engineer-filed-ethics-complaint-about-737-max-safety-issues-2019-10-02)said an engineer filed an internal ethics complaint over the company's decision to reject a safety system for the 737 Max on cost grounds that he believed could have reduced risks tied to two fatal crashes.

How did other markets trade?

The yield on the 10-year U.S. Treasury note was down nearly 4 basis points to 1.61% on Wednesday morning.

In commodities markets, West Texas Intermediate crude-oil for November delivery was down 85 cents, about 1.5%, to $52.80 a barrel on the New York Mercantile Exchange.

Gold for December delivery jumped $12.40, nearly 0.9%, to reach $1,501.90 an ounce.

In Asia, Chinese equity benchmarks were closed in observance of the 70th anniversary of Communist rule. Japan's Nikkei 225 meanwhile, fell 0.5%, wiping out a similar loss from Monday. European stocks traded lower, with the Stoxx Europe 600 down 1.6%.

(END) Dow Jones Newswires

October 02, 2019 11:17 ET (15:17 GMT)

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