U.S. stocks fell Wednesday, sending the Standard & Poor's 500 index to a one-month low, as jobs and factory data missed estimates and investors speculated whether the Federal Reserve will taper bond purchases.
The S&P 500 dropped 22.48, or 1.38%, to 1,608.90, the lowest close since May 2.
The Dow Jones industrial average closed down 216.95, or 1.43%, at 14,960.59; and the Nasdaq composite fell 43.78, or 1.27%, at 3,401.48. All numbers are preliminary.
Wednesday's economic data “may throw some cold water on this economic growth story continuing,” said Bill Schultz, who oversees about $1.1 billion as chief investment officer at McQueen Ball & Associates. “So you got this contrast in what the Fed should do. All those cross-currents throw on some caution on the whole market. Investors are taking a pause and a more look-and-see approach than they have in the past, where equities are the only place to be.”
Investors considered mixed data, as a report from ADP Research Institute showed companies in the U.S. hired fewer workers than projected in May amid federal budget cuts and higher taxes. Separate data from the Commerce Department showed U.S. factory orders in April fell short of estimates. A gauge of service industries, which covers almost 90% of the economy, rose more than forecast.
Stocks maintained losses after the Fed's Beige Book showed the economy expanded at a “modest to moderate” pace in 11 of 12 central bank districts, with broad-based gains ranging from business services to construction and manufacturing. The survey is based on data collected by Fed regional banks on or before May 24.
The S&P 500 has dropped 3.6% since closing at a record high on May 21 as Fed policymakers continue to debate whether the economy is strong enough to begin reducing monetary stimulus.
The Fed stimulus and better-than-expected corporate earnings have propelled the bull market in U.S. equities into a fifth year and driven the S&P 500 up 138% from a 12-year low in 2009.