UKX FTSE 100 Index

By Max Bernhard 

U.S. stocks fell Wednesday, following the path of equities overseas, and after private-sector employment stoked concerns about the economy.

The Dow Jones Industrial Average fell 244 points, or 0.9%, to 26328 shortly after the opening bell. The S&P 500 dropped 0.9% and the Nasdaq Composite declined 1%.

Elsewhere, the Stoxx Europe 600 was down 1.8%.

The nonfarm private sector in the U.S. added more jobs than expected in September, according to the ADP National Employment Report on Wednesday, but the report warned that the job market was showing signs of a slowdown as businesses are turning more cautious.

Markets overseas continued to react to disappointing economic data. Germany's leading economics research institutes jointly lowered their growth forecasts Wednesday for Europe's largest economy. They cited slowing global demand for capital goods, structural changes in the auto sector -- one of Germany's most important industries -- and political uncertainty. That followed Tuesday's figures showing manufacturing activity in the U.S. was at its lowest point in a decade in the U.S.

"There hasn't been a single month this year where Germany has seen expansion in its manufacturing sector," said Michael Hewson, chief market analyst at CMC Markets, who expects the weakness in manufacturing to spill over into the services sector.

If the manufacturing slowdown spreads to the still robust service sector, this would increase pressure on the Federal Reserve to cut rates again in October, said Stefan Schilbe, HSBC Germany's chief economist.

U.K. stocks overall were among the hardest hit in Europe. That was despite a weaker pound, which usually benefits FTSE 100 listed companies, many of which derive a majority of their earnings abroad.

Prime Minister Boris Johnson presented his latest Brexit proposal and warned he is still prepared to take the U.K. out of the EU at the end of October without a deal.

The FTSE 100's decline was driven by mining and oil companies as well as the construction sector, said Chris Beauchamp, chief market analyst at IG. U.K. construction activity data dropped in September, a slowdown which survey respondents attributed to uncertainty over Brexit.

In Asia, Korea's Kospi was down nearly 2% following news that North Korea fired at least one missile off its east coast. The move, seen as a show of strength, came after Pyongyang said it would resume official nuclear talks with the U.S. In Japan, the Nikkei fell 0.5% and Hong Kong's Hang Seng was down 0.2%. Mainland Chinese stock markets were closed for a holiday.

In commodities, Brent crude rose 0.3% to $58.70 a barrel.

The yield on U.S. 10-year Treasurys was slightly lower at 1.626%, from 1.638% Tuesday. Bond yields and prices move in opposite directions..

Write to Max Bernhard at Max.Bernhard@dowjones.com

(END) Dow Jones Newswires

October 02, 2019 09:54 ET (13:54 GMT)

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