Stocks slid today as weak economic data caused investors to doubt the strength of the recovery. The Dow Jones Industrial Average started off with slight gains, but fell steadily over the course of the trading session to finish down 112 points, or 0.8%.
Payroll processer ADP disappointed the market with its March jobs data, reporting that 158,000 jobs were added last month, below the 197,000 that the market expected and the smallest the company has reported since October. ADP's employment figures often differ significantly from the official one from the Labor Department's, which will be released on Friday. Economists expect that report to show 210,000 private sector jobs were added last month.
The ISM Services Index also came in slightly below estimates, hitting a rating of 54.4 against expectations of 55.5.
Oil prices also dropped by 3% late in the day as U.S. supplies hit their highest level since July 1990.
Not surprisingly, the banks were the worst performers on the Dow as Bank of America fell 2.8% and JPMorgan Chase dropped 2.4%. The slowdown in hiring and therefore the economic recovery would put an unexpected hurdle in front of the two big banks, which are dependent on consumers in a recovering housing market. The housing sector received its own warning signal in a report that said that mortgage applications dropped 4% last week.
Merck was one of just three blue chips to buck today's downward trend, finishing the day up 1%. The drugmaker today filed a patent-infringement lawsuit in India against Glenmark pharmaceuticals regarding an anti-diabetes drug. With more than 1 billion people in India, the drug market there looms large, especially as the population steadily moves into the middle class. Earlier this week, Swiss drugmaker Novartis lost a major ruling in India that would have given it patent protection over a cancer drug known as Gilvec.
Boeing also made some small gains today, rising 0.3%, as it reported a new order from British Airways and said it was halfway done with testing of the Dreamliner. In a vote of confidence for the troubled jet, the British airline will order 18 more Dreamliners, on top of an original order of 24, and said the Spanish airline Iberia, a division of the same company, may put in its own order. Testing to get the Dreamliner back in the skies is moving slower than expected but should be done within a month or so.
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