Stocks plunge amid global recovery fears
The Dow plummeted by more than 2 percent on Wednesday, losing about 279 points, after Moody's cut Greece's bond ratings
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The dollar rose against a basket of currencies. Meanwhile, oil prices declined. U.S. light, sweet crude fell $2.41 to settle at $100.29 a barrel, while London Brent crude slipped $2.20 to settle at $114.53 per barrel.
Precious metals closed mixed. Gold rose 0.4 percent to settle at $1,542, while silver fell 1.6 percent to $37.69.
On the economic front, the Institute for Supply Management's index of manufacturing fell to 53.5 in May from 60.4 in April, the lowest level since September 2009. Analysts expected the index to fall to 57.7.
Construction spending, meanwhile, rose 0.4 percent in April, the Commerce Department reported. But spending in April was revised down to a 0.1 percent gain from the previously reported 1.4 percent gain. Economists surveyed by Reuters had expected construction spending to rise 0.3 percent.
And the private sector added only 38,000 jobs in May, according to a jobs report from Automatic Data Processing and Macroeconomic Advisers, far less than what most analysts had expected. In April, the private sector had gained 177,000 jobs, down from the 179,000 initially reported.
The weak economic news is prompting analysts to cut their forecasts for April non-farm payrolls, which will be released on Friday. Goldman Sachs cut its forecast to a 100,000 gain from 150,000, while Credit Suisse cut its forecast to 120,000 from 185,000.
Economists surveyed by Reuters had expected payrolls to rise by 180,000 in May, down from a gain of 244,000 in April.
Another report showed the planned layoffs rose 37,135 job cuts last month, up 1.8 percent from April, and up 4.3 percent from a year ago, according to Challenger, Gray & Christmas, an outplacement firm.
Wednesday's weak economic data continues a recent trend and the “negative seasonality factor” will likely keep the markets choppy for the “next few months,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research.
However, Detrick said a lot of the economic concerns have already been priced into the markets and he expects stocks to climb in the second half of the year.