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Date Posted: 02:56:06 04/06/13 Sat
Author: Wednesday 3/4/2013 Jobs
Subject: U.S. Stocks Pull Back After Data Disappoint

U.S. Stocks Pull Back After Data Disappoint
04/04/2013 7:32AM
--Stocks close lower, narrowly miss second-worst loss of 2013

--Private-sector jobs, non-manufacturing business activity reports disappoint

--DJIA off 111.66; S&P 500 closes 16.56 lower


By Alexandra Scaggs

NEW YORK--Stocks sold off Wednesday on the heels of a pair of disappointing readings on U.S. growth, as investors hit pause ahead of a trio of economic headlines expected to move markets later in the week.

The defensive tilt comes as investors await monetary-policy announcements out of the European Central Bank and Bank of Japan on Thursday and employment data in the U.S. Friday.

"It might be a bumpy road toward the end of the week," said Jonathan Corpina, senior managing partner with brokerage firm Meridian Equity Partners Inc.

On Tuesday, the Dow and the Standard & Poor's 500-stock index both rose to records for the second time in three sessions. On Wednesday, the Dow Jones Industrial Average was down 111.66 points, or 0.8%, to 14550.35.

The S&P 500 shed 16.56 points, or 1.1%, to 1553.69, and the Nasdaq Composite Index pulled back 36.26 points, or 1.1%, to 3218.60.

Also attracting attention was a decline in the Russell 2000 index, a gauge of small-capitalization stocks. The index slid more steeply than other benchmarks, pulling back 1.7%, signaling an investor aversion to riskier corners of the market. The Dow Jones Transportation Average--an index of 20 shipping, railroad and airline stocks that is considered a bellwether of economic activity--also saw declines outpacing the broader market, losing 1.3%.

A pair of disappointing economic reports sparked a pullback that extended to session lows late in the day. Shares looked set to notch their second-biggest decline of the year, until buyers stepped in toward the close.

"The sellers took us [lower], and the buyers picked that up," said J.J. Kinahan, chief derivatives strategist at online brokerage TD Ameritrade Holding Corp.

The Institute for Supply Management's reading on the U.S. nonmanufacturing sector came in worse than expected, slipping to its lowest level since August 2012, and employment slowed as well.

A disappointing report on private-sector jobs growth for March also cast a pall over the market. Data compiled by Automatic Data Processing and Moody's Analytics showed an increase of 158,000 jobs on the month, well below the 192,000 expected. The measure is seen as a preview to Friday's employment report from the Bureau of Labor Statistics.

"We're not terribly surprised about" the pullback, said Stephen Wood, chief market strategist at Russell Investments, which oversees $163 billion in assets. "We've been guarded, as the market has been up so far year to date."

The firm's investment managers have been paring exposure to riskier investments from their portfolios, by trimming holdings in areas such as Europea

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