Stocks Fall After US Hiring Report Disappoints

by Lance Turner  on Wednesday, Oct. 2, 2013 11:23 am  

NEW YORK — Weak hiring and worries about a protracted government shutdown pushed the U.S. stock market lower Wednesday.

U.S. businesses added 166,000 jobs last month, payroll company ADP said Wednesday, a level consistent with only a modest improvement in hiring. Economists polled by FactSet had forecast 180,000 jobs would be added.

The report may be the only news investors get on hiring this week because the Labor Department will postpone the release of its September jobs survey, scheduled for Friday, if the government shutdown goes past Wednesday.

About 800,000 federal workers were staying home again Wednesday on the second day of the first partial shutdown of the U.S. government since the winter of 1995-96.

Republicans in the House of Representatives are insisting that Democrats negotiate over the new health care law as part of the funding deadlock. Senate Democrats, led by Majority Leader Harry Reid of Nevada, insist that Republicans pass a straightforward temporary funding bill with no strings attached.

"The markets are sending a loud message to Washington lawmakers to get their act together and resolve the budget crisis and move on," said Peter Cardillo, chief market economist at Rockwell Global Capital.

The market moved sharply lower in early trading, then pared its loss in the late morning following news that President Barack Obama had invited Congressional leaders to the White House for a meeting on the shutdown.

The Dow Jones industrial average fell as much as 147 points in the first hour of trading. Shortly before noon it was down 80 points, 0.5 percent, at 15,111 points.

The Standard & Poor's 500 index was down six points, or 0.4 percent, at 1,688. The Nasdaq composite declined nine points, or 0.2 percent, to 3,808.

All 10 industry sectors in the S&P 500 fell. Declines were led by the makers of consumer staples and industrial companies.

Defense companies, which rely on government contracts for a large part of their revenue, led declines for industrial companies. Raytheon fell $2.06, or 2.6 percent, to $75.77. Lockheed Martin dropped $3.08, or 2.4 percent, to $131.60.

The longer the budget fight drags on, the more investors will start to fret about the looming showdown about raising the government's borrowing limit, said Brad McMillan, the Chief Investment Officer at Commonwealth Financial, an investment adviser.

 

 

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