US stocks fell for a second day and the dollar dipped after a weaker-than-expected report on private sector employment spurred investor concerns that a highly anticipated monthly US jobs report tomorrow could also point to slowing economic growth.
However, oil futures rallied as talks over Iran’s nuclear program continued, curbing expectations of an immediate deal that would allow Iranian crude on to the market.
The ADP National Employment Report showed that US private employers added 189,000 jobs last month, well below economists’ expectations for 225,000 jobs. The report was the weakest since January 2014.
The employment data also dragged down US Treasuries yields as investors bet that the Federal Reserve may not raise rates until the end of 2015.
The Dow Jones industrial average fell 76.6 points, or 0.43 per cent, to 17,699.52, the S&P 500 lost 7.47 points, or 0.36 per cent, to 2,060.42 and the Nasdaq Composite dropped 25.44 points, or 0.52 per cent, to 4,875.45.
The rebound in oil prices helped boost the S&P 500 index’s energy sector, making it one of three sectors to show gains for the benchmark index yesterday.
After a decline on Tuesday, Europe’s benchmark FTSEurofirst 300 recovered and was up 0.45 per cent. London’s FTSE was up 0.6 per cent, Germany’s DAX rose 0.3 per cent and France’s CAC was up 0.71 per cent after eurozone manufacturing data was revised higher.
Eurozone bonds remained in favour as the European Central Bank pushed on with its one trillion euro buying plan, while oil was under pressure amid hopes of an Iran nuclear deal that is expected to loosen sanctions on the Opec member.
Data from China was less robust, bolstering a view that Beijing has to provide more stimulus to keep growth on track, with some analysts eyeing moves to directly push down the yuan’s value.
The HSBC/Markit China Manufacturing Purchasing Managers’ Index (PMI) came in at 49.6, slightly higher than a preliminary ‘flash’ reading of 49.2, but still below the 50-mark separating contraction from expansion.
An employment subindex contracted for a 17th straight month, falling to its lowest since August 2014.
Japan’s Nikkei sank 0.9 per cent after a lacklustre Bank of Japan business survey.
After Greece failed on Tuesday to reach an initial deal on reforms with its lenders, the Athex General Composite Share Price index was down 1.3 per cent.