US stocks edged lower yesterday as economic stimulus measures by major central banks failed to excite investors before a US jobs report expected to show tepid growth.
After the S&P 500 index’s strongest three-day run this year, investors stepped back, leaving the broad index and the Dow modestly lower and the Nasdaq essentially flat.
Trading volume was light after the 4 July US market holiday and before the government’s June non-farm payrolls report today.
The data is expected to show Europe’s debt crisis is weighing heavily on the US economy. Analysts expect the economy added 90,000 jobs last month, a level that won’t make much of a dent in the grim unemployment situation.
Financial stocks weighed on Wall Street, with Dow component JPMorgan Chase falling 4.2 per cent to $34.38 and Bank of America off 3 per cent at $7.82.
The S&P Financial index and the KBW Banks index fell about 1.5 per cent. Financial shares have often taken the brunt of selling during the European crisis, though they experienced a good run during the recent rally.
Wall Street was little impressed by the actions in China, Europe and Britain to loosen monetary policy, which sent the euro lower against the US dollar.
Stocks also derived little benefit from reports yesterday showing hopeful signs about US hiring by private employers. Markets give more weight to the broader monthly report from the US Labor Department. .
The Dow Jones industrial average was down 47.15 points, or 0.36 per cent, at 12,896.67. The Standard & Poor’s 500 Index was down 6.44 points, or 0.47 per cent, at 1,367.58. The Nasdaq Composite Index was up 0.04 points at 2,976.12.
Losses in the Nasdaq were limited by Apple, which rose 1.8 per cent to $609.94, and Google, up 1.4 per cent.
News that the US service sector slowed to a 2 1/2-year low in June was in line with investor fears that the Eurozone debt crisis was sapping global growth. Traders booked gains from the strong run that began Friday and extended through Tuesday.
Meanwhile, Spain’s difficulties increased, with its 10-year borrowing costs rising despite the Eurozone’s latest plan to help the region’s troubled economies. Costco Wholesale, Macy’s, Kohl’s and Target were among the retail chains that reported disappointing June sales at stores open at least a year. Costco shares were down 0.4 per cent at $94 and Target fell 1.1 per cent to $57.15. Volume was light, with about 5.19bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84bn.
About 54 per cent of companies traded on the New York Stock Exchange closed in negative territory.