By Saumya Vaishampayan
U.S. stocks fell Wednesday after a report on private-sector
employment missed expectations and as a pullback in oil prices
weighed on energy stocks.
The Dow Jones Industrial Average slipped nine points, or 0.1%,
to 17657. The S&P 500 fell seven points, or 0.3%, to 2043, and
the Nasdaq Composite Index lost 20 points, or 0.4%, to 4707.
The Dow fell less than other benchmarks because of
stronger-than-expected results from Walt Disney Co. The Dow is a
price-weighted index, so it tends to be influenced by pricier
components like Disney.
Investors continued to watch oil prices. Crude-oil futures fell
4.4% to $50.71 a barrel, following four straight sessions of gains.
Chevron Corp. and Exxon Mobil Corp. were among the biggest
decliners on the Dow industrials.
Private payrolls increased by 213,000 in January, according to a
report compiled by payroll processor Automatic Data Processing Inc.
and forecasting firm Moody's Analytics. Economists surveyed by The
Wall Street Journal had expected payrolls to increase by
240,000.
Still, investors said the overall employment trend remains
positive.
"The economy is expanding, the private sector is adding jobs,
and that's good news" for stocks, said Matthew Kaufler, who
oversees about $2 billion as a portfolio manager at Federated
Investors. "With the economy on firmer footing, inflation
expectations subdued, corporations returning capital aggressively
to shareholders, those all point to an attractive environment for
equities," he added.
The ADP report is often viewed as an indicator for Friday's
closely watched jobs report, which is expected to show the economy
added 237,000 jobs in January, according to economists surveyed by
The Wall Street Journal.
Stock-market swings have picked up in recent weeks, driven in
part by uncertainty about the impact of the Federal Reserve's
widely expected increase in interest rates and sharp moves in
energy and currency markets. The Dow has moved by more than 1% in
either direction in the six sessions ended Tuesday. Through
Tuesday's close, the Dow is 2.1% below its record close of 18053.71
and the S&P 500 is 1.9% off its record of 2090.57.
Stocks advanced Tuesday, with the Dow up 1.8% to 17666.40. The
S&P 500 gained 1.4% to 2050.03.
"We're in a period where the market is really thrashing around,"
said Jeff Morris, head of U.S. equities at Standard Life
Investments. "It has to do a balancing act between those portions
of the U.S. economy showing genuine strength and recovery and
international influences," such as global growth concerns and
political developments in Greece, he added.
Greece's new leaders continued to meet with their European
counterparts as they try to reach an agreement about the country's
hefty debt pile. European stocks fell, with France's CAC 40 down
0.3% and Germany's DAX 30 declining 0.4%. The Stoxx Europe 600 was
little changed in recent trade.
China's central bank on Wednesday cut the amount of deposits set
aside by commercial banks in case of financial trouble, taking a
major step to boost bank lending. The move is part of a continued
effort to kick-start growth.
"We're looking for good companies that aren't quite as dependent
on the macro environment," said Mr. Morris. He added that he's
looking at technology companies that are involved with
cybersecurity.
In other markets, gold futures rose 0.5% to $1267.00 an
ounce.
Treasury prices fell, pushing the yield on the 10-year note up
to 1.816% from 1.781% on Tuesday.
Among individual stocks, Walt Disney said total revenue rose 9%
to $13.39 billion and net income increased 19% to $2.18 billion.
Results beat expectations. Shares rose 5.5%.
General Motors Co. said fourth-quarter profit surged 91%,
beating analyst expectations. The company also said it plans to
boost its dividend starting in the second quarter. Shares rose
2.9%.
Staples Inc. agreed to buy Office Depot Inc. for $6.3 billion.
The two companies have roughly 4,000 stores and they projected
annual sales of more than $39 billion. Shares of Staples fell 7.9%,
while those of Office Depot rose 2.9%.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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