Stocks skid on concerns about slow hiring; retailers drop
U.S. stocks are sliding Thursday as investors react to mounting evidence that hiring has slowed based on a report from payroll processor ADP. Retailers are slipping after L Brands, the parent company of Victoria's Secret, reported weak June sales. Technology and energy companies are also falling, while high-dividend stocks slip in response to a jump in bond yields.
KEEPING SCORE: The Standard & Poor's 500 index dropped 11 points, or 0.5%, to 2,421 as of 1 p.m. Eastern Time. The Dow Jones industrial average fell 85 points, or 0.4%, to 21,393. Earlier in the day the Dow was down 140 points. The Nasdaq composite sank 27 points, or 0.4%, to 6,123. The Russell 2000 index of smaller-company stocks declined 8 points, or 0.6%, to 1,412.
JOBS: Private U.S. businesses added 158,000 jobs in June, according to ADP. That was fewer than analysts expected. H iring has slowed in recent months as the number of unemployed people has stayed near historic lows. The government will give a report on public and private job growth Friday.
Read more: Private-sector job growth slows to still-solid 158,000, ADP says »
As investors wondered if economic growth will stay sluggish, consumer-focused companies and technology firms took sharp losses.
TAKING ILL: All but one healthcare company in the S&P 500 lost ground. Biotech drugmaker Amgen declined 1.1% to $172.40. Medical device maker Medtronic fell 1.3% to $87.72. Merck was down 1.5% to $63.23 after it said it is stopping two studies of its cancer drug Keytruda as a treatment for multiple myeloma. Merck said more patients who were treated with Keytruda died, and the Food and Drug Administration halted the studies because the risks of a treatment that included Keytruda outweighed the potential benefits.
Technology companies, which had edged higher Wednesday, turned lower again. Apple sank $1.03 to $143.06 and Intel dropped 1.3% to $33.90. Electronic storage company Seagate Technology retreated 4.1% to $37.42. Cisco Systems slipped 29 cents to $30.83.
SECRET'S OUT: L Brands dropped 13.2% to $46.98 â€" by far the l argest loss of any S&P 500 company â€" after it said its sales fell 6% in June as the company continues to struggle with the effects of ending its swimwear business. Sales at stores open at least a year dropped 9%.
Athletic apparel maker Under Armour dropped 5.3% to $20.97. Hanesbrands shed 3.4% to $22.40. Signet Jewelers slid 3% to $62.14. Amazon eked out a small gain.
SHOPPING: The parent company of QVC will buy the Home Shopping Network for about $2.6 billion in stock. Liberty Interactive said it will value QVC at $40.36 a share in the deal. It already had a 38% stake in HSN, whose shares jumped 27.5% to $39.90. Liberty Interactive shares slipped 15 cents to $24.31.
GEOPOLITICS: Global leaders arrived in Hamburg, Germany, for the G-20 summit as the U.S. and South Korea continued to respond to North Korea's recent missile test. On Thursday, South Korean jets and navy ships fired missiles into the ocean during drills, a display of military power two days after North Korea test-launched its first intercontinental ballistic missile.
Read more: The U.S. may have one card to play against North Korea: trade »
The VIX, a measurement of how much volatility investors expect, climbed 9% to 11.98, although that is still a relatively low level.
BONDS: Bond prices skidded. The yield on the 10-year Treasury note rose to 2.37% from 2.33%. Banks made small gains, as higher bond yields mean higher interest rates and larger profits from lending.
Investors sold shares of big-dividend stocks such as real estate investment trusts and telecommunications companies, as the rising bond yields made those stocks less appealing to investors seeking income.
OIL: Benchmark U.S. crude oil bounced back from Wednesday's loss and rose $1.15, or 2.5%, to $46.280 a barrel in New York. Brent crude, used to price international oils, rose $1.05, or 2.2%, to $48.84 a barrel in London. However, energy companies’ stocks traded lower.
CURRENCIES: The dollar remained at 113.35 yen. The euro rose to $1.1413 from $1.1340.
OVERSEA S: Germany's DAX fell 0.6% and the CAC 40 in France was down 0.5%. The British FTSE 100 index lost 0.4%. Japan's Nikkei 225 fell 0.4% and the Kospi in South Korea edged down less than 0.1%. The Hang Seng of Hong Kong shed 0.2%.
UPDATES:
10:45 a.m.: This article was updated with market prices and context.
This article was originally published at 7 a.m.
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