Stocks fall after weak economic reports

By Steve Rothwell

Associated Press

Published: Wednesday, June 5 2013 10:02 a.m. MDT

Specialist Thomas Facchine, second from right, directs trades in Metro PCS at the close of trading on the floor of the New York Stock Exchange, Tuesday, April 30, 2013.

Richard Drew, Associated Press

Enlarge photo»

NEW YORK — Stocks edged lower in early trading Wednesday after economic reports suggested that the economy is growing at a sluggish pace.

Private employers added fewer jobs last month than economists had forecast, and orders to U.S. factories were also weaker than expected.

Investors have become increasingly sensitive to economic reports in the last two weeks. They are trying to anticipate when the Federal Reserve will pull back on its $85 billion of bond purchases a month. That program has supported markets this year, and on some days stocks have even rallied on speculation that an ailing economy would ensure the stimulus will remain in place.

"We're pleased to see the market sell off on some bad news," said John Lynch, a regional chief investment officer for Wells Fargo private bank. "The whole idea that bad news was good news was frustrating because it suggests to me that the markets are becoming too Fed-dependent."

Not all the news was bad. U.S. service companies grew at a faster pace in May, driven by a jump in new orders. However, fewer jobs were added in the sector.

The Dow Jones industrial average fell 73 points, or 0.4 percent, to 15,103 in the first hour of trading. The Standard & Poor's 500 index fell seven points, or 0.5 percent, to 1,624. The Nasdaq composite dropped 13 points, or 0.4 percent, to 3,431.

In commodities trading, oil rose $1.031, or 1.1 percent, to $94.34 a barrel. Gold rose $5, or 0.4 percent, to $1,402. The dollar fell against the euro and the Japanese yen.

Investors will get more information on hiring Friday when the Labor Department releases its monthly employment report.

Among stocks making big moves:

—Walgreen rose $1.08, or 2.1 percent, to $49.09 after the company reported revenue from established stores beat analysts' expectations for May, even though a rise in generic drugs continues to hurt revenue at the nation's largest drugstore chain.

—Apple fell $2.21, or 0.5 percent, to $447 after a U.S. trade agency issued a ban on imports of Apple's iPhone 4 and a variant of the iPad 2 after finding the devices violate a patent held by South Korean rival Samsung Electronics.

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