UKX FTSE 100 Index

By Max Bernhard and Paul Vigna 

U.S. stocks fell Wednesday after the latest private-sector jobs report further stoked concerns about the economy.

The Dow Jones Industrial Average fell 466 points, or 1.8%, while the S&P 500 dropped 1.7% and the Nasdaq Composite lost 1.6%.

The ADP National Employment Report on Wednesday beat muted expectations -- the private sector added 135,000 jobs in September, above expectations. But the firm cut its August estimate by nearly 40,000, and the three-month average of 145,000 is down from 214,000 a year ago.

Altogether, it was the latest sign that businesses are turning more cautious in the face of a weakening global economy.

"It feels like one thing after another the last couple of days," said David Laffertry, chief market strategist at Natixis. While the ADP report was soft rather than outright weak, he said, "within the context of other bad macro data the last couple of days, it's sort of piling on."

Markets overseas continued to react to disappointing economic data. The Stoxx Europe 600 was down 2.2%, with Germany's DAX 1.9% lower and the U.K.'s FTSE 100 down 2.8%.

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.

"You've got Trump flattening, Warren surging, and Johnson threatening," Mr. Lafferty said. "You've got this wet blanket of geopolitical overhang in a market that's already struggling."

In U.S. equities, every sector fell. Technology, materials, and industrials were all down around 2%. Intuit fell 3.1%. Mastercard lost 2.7%. Microsoft fell 2.4%, and Apple lost 2.2%.

Air Products & Chemicals fell 3.3% and LyondellBassell Industries dropped 2.6%.

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. The Institute for Supply Management's services sector report is due Thursday.

The market odds of a Fed rate cut in October rose to 72% Wednesday morning, up from 53% a week ago, according to data from CME's FedWatch tracker.

In Asia, South 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, WTI crude fell 1.7% to $52.64 a barrel.

The yield on U.S. 10-year Treasurys was lower at 1.605%, from 1.638% Tuesday. Bond yields and prices move in opposite directions.

Write to Max Bernhard at Max.Bernhard@dowjones.com and Paul Vigna at paul.vigna@wsj.com

(END) Dow Jones Newswires

October 02, 2019 11:25 ET (15:25 GMT)

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