Wall Street fell in late morning trading, reversing an earlier gain, after data showed the U.S. economy is not growing as fast.
As of 11:04 a.m. in New York, the Dow Jones Industrial Average was down 0.6% at 16,058. The S&P 500 declined 1.0% to 1,884, while the Nasdaq 100 fell 1.5% to 4,130.
Data from the Institute for Supply Management showed on Wednesday that companies in the U.S. service sector such as retail, banking and healthcare expanded in January at the slowest pace in almost two years. The ISM said its non-manufacturing index fell to 53.5% from 55.8% in December, missing economists’ expectations of a 55.2% reading.
A separate report earlier in the day showed private-sector employment gains increased in January but at a slower pace than in the prior month. Automatic Data Processing Inc. said employers added 205,000 jobs in January, compared to December’s gain of $267,000.
The data comes ahead of the more comprehensive employment report by the U.S. government on Friday.
In Europe, equities headed for a third day of losses. The Stoxx Europe 600 Index fell 2.5%.
In commodities, oil rallied three percent despite a disappointing inventories report. As of 10:52 a.m., West Texas Intermediate for March delivery rose 3.5% to $29.83 a barrel on the New York Mercantile Exchange. The U.S. Energy Information Administration reported on Wednesday that crude inventories rose by 7.8 million barrels to above 500 million barrels for the week ended January 29 — a weekly record high.
Yahoo! Inc (NASDAQ:YHOO) fell nearly eight percent, hitting its lowest intraday price since mid-2013. The Web company said it is laying off about 1,700 employees and mulling “strategic alternatives.”
Chipotle Mexican Grill, Inc (NYSE:CMG) tumbled more than seven percent. The embattled burrito restaurant chain marked its worst quarter as a publicly traded on Tuesday when it posted a 44% drop in its fourth-quarter profit. An E.coli outbreak and other health safety issues have driven customers away.
Comcast Corporation (NASDAQ:CMCSA) rose 2.3% to $55.87. The largest U.S. cable provider reported better-than-expected quarterly revenue, helped by growth in its media and entertainment unit NBCUniversal.
Merck & Co. (NYSE:MRK) fell 3.3% to $48.77 after the strong dollar and increasing competition spurred the drugmaker reported an 87% drop in fourth-quarter profit and lower sales.
The General Motors Company (NYSE:GM) stumbled 4.4% to $28.37, erasing an earlier gain, even as the largest U.S. automaker reported quarterly earnings and revenue that beat analysts’ expectations.
Lowe’s Companies Inc (NYSE:LOW) slid 7.2% to $66.66 after the U.S. home improvement chain agreed to buy Canadian rival Rona Inc (TSE:RON) in a friendly takeover valued at CA$3.2 billion. Rona shares, meanwhile, almost doubled to a nine-year high of C$23.37 in Toronto trading.