By Alexandra Scaggs
U.S. stocks edged lower in early Wednesday trading, as investors
weighed a better-than-expected reading on service-sector business
activity against disappointing private-sector jobs data.
The Dow Jones Industrial Average fell 24 points, or 0.1%, to
16699. The S&P 500 index lost two points, or 0.1%, to 1922 and
Nasdaq Composite Index shed three points, or 0.1%, to 4231.
On Tuesday, the Dow slipped 21 points, or 0.1%, to snap a
three-session win streak, and the S&P 500 eased less than 0.1%,
failing to close at a record for the first time in four
sessions.
Stocks pushed lower before the market's open after a
disappointing report on the labor market. Data compiled by
Automatic Data Processing and Moody's Analytics showed that 179,000
private-sector jobs were added in May, falling short of
expectations of a 210,000 increase. The report is seen as a preview
of the government's February employment report Friday, which is
expected show nonfarm payroll growth of 210,000.
Benchmarks then pared losses after a report on service-sector
activity came in better than expected. The Institute for Supply
Management's nonmanufacturing composite index for May came in at
56.3, above expectations of 55.2. Up next is the Federal Reserve's
Beige Book survey of regional economic activity, due out at 2 p.m.
EDT.
Despite the raft of economic reports, trading remained
relatively light early on Wednesday, traders said.
"There's nothing to get people excited," said Michael O'Rourke,
chief market strategist at JonesTrading Institutional Services.
"The volume has been awful."
Many investors have been holding tight in their current
positions, or raising cash levels as the S&P 500 remains near
its all-time highs. But Steve Krawick, president of West Chester
Capital Advisors, which manages $900 million, said that he has
remained fully invested in U.S. stocks, and has been buying shares
of companies like Apple Inc. and Kodiak Oil & Gas.
"There are pockets of opportunity," said Mr. Krawick. "We're
still bullish, but not as bullish as we were at the start of
2013."
Among other economic data released, the trade deficit for April
widened 6.9% to $47.2 billion versus expectations of $40.9 billion.
First-quarter productivity was revised to show a decline of 3.2%
and unit labor costs increased 5.7%, close to expectations.
The yield on the 10-year Treasury note eased to 2.586%, after
settling at a three-week high of 2.592% late Tuesday.
Gold futures edged up 0.2% to $1,247.40 a troy ounce, after
snapping a six-session losing streak on Tuesday. Crude-oil futures
rose 0.7% to $103.37 a barrel. The dollar lost some ground against
the euro, but edged higher against the yen.
European markets slipped ahead of the widely anticipated
European Central Bank meeting on Thursday. The Stoxx Europe 600
eased 0.2% to extend a pullback from a 6 1/2-year high hit on
Monday.
Economic data out of the euro zone continued to support
expectations that the ECB will introduce new stimulus measures by
either cutting interest rates or boosting liquidity through asset
purchases. Data firm Markit said its composite purchasing managers
index, which measures activity across both the manufacturing and
services sectors, fell to 53.5 in May from 54 in April.
Meanwhile, a second estimate of first-quarter economic growth
was unchanged at 0.9%, in line with forecasts.
Asian markets were mostly lower, with China's Shanghai Composite
falling 0.7% to suffer a fourth-straight decline. Japan's Nikkei
Stock Average bucked the regional trend by tacking on 0.2%.
In corporate news, Dow component UnitedHealth slipped 0.2%
despite the insurer increasing its quarterly dividend by 34% to
37.5 cents a share, and renewed its share buyback program, which
authorizes the company to repurchase 100 million shares over
time.
Protective Life ran up 18% after Japan's Dai-ichi Life said it
would buy the company in a deal valued at $5.7 billion.
Tibco Software slumped 8.8% after the company lowered its
adjusted earnings and revenue outlook for the quarter ending June
1, citing weak sales of its analytics software called Spotfire.
Tomi Kilgore contributed to this article
Write to Alexandra Scaggs at alexandra.scaggs@wsj.com