The U.S. stock market recorded its biggest loss in weeks on Tuesday after the Fed's Beige Book report showed that the economy is expanding only at a modest to moderate rate.
A series of mediocre economic reports and slack growth in corporate revenue also weighed on sentiment. After the big run-up in the major averages to start 2013, the market is starting to look vulnerable to profit-taking as uncertainty is on the upswing.
Volatility levels are also rising as traders look to buy protection in the options market amid signs that the rally may be coming to an end. The S&P 500 closed Tuesday's session near a one month low and the bullish mood on Wall Street may fade in the coming weeks if a deeper correction is on the horizon.
Major Averages
The Dow Jones Industrial Average fell 217 points, or 1.43 percent, to 14,961.
The S&P 500 shed more than 22 points, or 1.38 percent, to close at 1,609.
The Nasdaq lost almost 44 points, or 1.27 percent, to 3,401.
ADP Employment Change
According to the ADP Employment report, the economy added 135,000 jobs in May. This compared to 113,000 in the prior month and consensus expectations calling for a rise of 157,000.
Factory Orders
Factory orders rose 1.0 percent in April after declining 4.7 percent in March. This compared to consensus expectations calling for an increase of 1.6 percent.
ISM Services
Although the manufacturing industry contracted in May, the services sector continued its expansion. The ISM Non-manufacturing Index rose to 53.7 in May compared to 53.1 in April. This came in slightly above consensus expectations calling for a rise to 53.5.
Commodities
Crude oil prices were mixed late on Wednesday. At last check, NYMEX crude futures were up 0.39 percent to $93.67 while Brent crude contracts had lost 0.30 percent to $102.93. Natural gas was last trading up 0.13 percent to $4.00.
Precious metals were slightly higher on Tuesday. At last check, COMEX gold futures were up 0.24 percent to $1,400.60. Silver contracts had risen 0.23 percent to $22.46. Copper futures fell 0.15 percent on the session.
In the grains complex, both corn and wheat traded lower. At last check, corn futures were down a little less than 2 percent while wheat lost a little more than 1 percent. Movers in soft commodities included cocoa, which was up a little better than 1 percent and lumber, which added more than 3 percent.
Bonds
Bond prices jumped on Tuesday as investors moved cash out of riskier assets. Near the close of equities, the iShares Barclays 20+ Year Treasury Bond ETF (TLT) was up more than 1 percent to $115.05. The rise in prices pushed yields down on the session.
The 2-Year Note was last yielding 0.29 percent while the 5-Year yield was at 1.02 percent. The 10-Year Note yield, which has risen 35 basis points over the last month, was at 2.09 percent and the yield on the 30-Year Bond was sitting at 3.25 percent.
Currencies
The U.S. dollar was slightly lower on Tuesday. At last check, the PowerShares DB US Dollar Index Bullish ETF (UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.20 percent to $22.42.
The closely watched EUR/USD pair was last up 0.04 percent to $1.3086. Other movers included the USD/JPY, which fell 0.86 percent, and the AUD/USD, which lost 1.13 percent.
Volatility and Volume
The VIX jumped more than 7 percent late on Tuesday as the equity market recorded sharp losses. The widely watched barometer of market fear was last trading at 17.43.
Volume was heavier than normal as traders and investors reacted to market losses. Around 193 million SPDR S&P 500 ETF (SPY) shares traded hands compared to a 3-month daily average of just under 126 million.
Stock Movers
Mattress Firm (MFRM) jumped around 6 percent after the company's first-quarter earnings results.
Juniper Networks (JNPR) climbed almost 7 percent heading into the closing bell after the company's CEO indicated at a technology conference that Juniper's routing performance has been above average in the second-quarter.
RPC (RES) rose better than 5 percent on Tuesday after the company announced that it would be expanding its buyback program.
Digital Realty Trust (DLR) climbed better than 5 percent on the session, although the reason for the move was not immediately clear.
Cyberonics (CYBX) added around 5 percent on Tuesday after the company's Q4 financial results.
Tesaro (TSRO) fell almost 11 percent on the day as traders took profits in the stock, which had been up sharply this week.
Shares of Chinese ADR Giant Interactive (GA) fell around 11 percent after the company announced a share sale.
Ubiquiti Networks (UBNT) plunged for the second day in a row after a share offering priced at a 4.4 percent discount. The stock lost almost 10 percent on the session.
Mueller Water Products (MWA) lost almost 9 percent on Tuesday after the stock was downgraded to a Strong Sell by Zacks.
Nomura Holdings (NMR) lost around 7 percent on Tuesday, possibly as a result of the strong up-move in the Japanese Yen.
BY Scott Rubin
A series of mediocre economic reports and slack growth in corporate revenue also weighed on sentiment. After the big run-up in the major averages to start 2013, the market is starting to look vulnerable to profit-taking as uncertainty is on the upswing.
Volatility levels are also rising as traders look to buy protection in the options market amid signs that the rally may be coming to an end. The S&P 500 closed Tuesday's session near a one month low and the bullish mood on Wall Street may fade in the coming weeks if a deeper correction is on the horizon.
Major Averages
The Dow Jones Industrial Average fell 217 points, or 1.43 percent, to 14,961.
The S&P 500 shed more than 22 points, or 1.38 percent, to close at 1,609.
The Nasdaq lost almost 44 points, or 1.27 percent, to 3,401.
ADP Employment Change
According to the ADP Employment report, the economy added 135,000 jobs in May. This compared to 113,000 in the prior month and consensus expectations calling for a rise of 157,000.
Factory Orders
Factory orders rose 1.0 percent in April after declining 4.7 percent in March. This compared to consensus expectations calling for an increase of 1.6 percent.
ISM Services
Although the manufacturing industry contracted in May, the services sector continued its expansion. The ISM Non-manufacturing Index rose to 53.7 in May compared to 53.1 in April. This came in slightly above consensus expectations calling for a rise to 53.5.
Commodities
Crude oil prices were mixed late on Wednesday. At last check, NYMEX crude futures were up 0.39 percent to $93.67 while Brent crude contracts had lost 0.30 percent to $102.93. Natural gas was last trading up 0.13 percent to $4.00.
Precious metals were slightly higher on Tuesday. At last check, COMEX gold futures were up 0.24 percent to $1,400.60. Silver contracts had risen 0.23 percent to $22.46. Copper futures fell 0.15 percent on the session.
In the grains complex, both corn and wheat traded lower. At last check, corn futures were down a little less than 2 percent while wheat lost a little more than 1 percent. Movers in soft commodities included cocoa, which was up a little better than 1 percent and lumber, which added more than 3 percent.
Bonds
Bond prices jumped on Tuesday as investors moved cash out of riskier assets. Near the close of equities, the iShares Barclays 20+ Year Treasury Bond ETF (TLT) was up more than 1 percent to $115.05. The rise in prices pushed yields down on the session.
The 2-Year Note was last yielding 0.29 percent while the 5-Year yield was at 1.02 percent. The 10-Year Note yield, which has risen 35 basis points over the last month, was at 2.09 percent and the yield on the 30-Year Bond was sitting at 3.25 percent.
Currencies
The U.S. dollar was slightly lower on Tuesday. At last check, the PowerShares DB US Dollar Index Bullish ETF (UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.20 percent to $22.42.
The closely watched EUR/USD pair was last up 0.04 percent to $1.3086. Other movers included the USD/JPY, which fell 0.86 percent, and the AUD/USD, which lost 1.13 percent.
Volatility and Volume
The VIX jumped more than 7 percent late on Tuesday as the equity market recorded sharp losses. The widely watched barometer of market fear was last trading at 17.43.
Volume was heavier than normal as traders and investors reacted to market losses. Around 193 million SPDR S&P 500 ETF (SPY) shares traded hands compared to a 3-month daily average of just under 126 million.
Stock Movers
Mattress Firm (MFRM) jumped around 6 percent after the company's first-quarter earnings results.
Juniper Networks (JNPR) climbed almost 7 percent heading into the closing bell after the company's CEO indicated at a technology conference that Juniper's routing performance has been above average in the second-quarter.
RPC (RES) rose better than 5 percent on Tuesday after the company announced that it would be expanding its buyback program.
Digital Realty Trust (DLR) climbed better than 5 percent on the session, although the reason for the move was not immediately clear.
Cyberonics (CYBX) added around 5 percent on Tuesday after the company's Q4 financial results.
Tesaro (TSRO) fell almost 11 percent on the day as traders took profits in the stock, which had been up sharply this week.
Shares of Chinese ADR Giant Interactive (GA) fell around 11 percent after the company announced a share sale.
Ubiquiti Networks (UBNT) plunged for the second day in a row after a share offering priced at a 4.4 percent discount. The stock lost almost 10 percent on the session.
Mueller Water Products (MWA) lost almost 9 percent on Tuesday after the stock was downgraded to a Strong Sell by Zacks.
Nomura Holdings (NMR) lost around 7 percent on Tuesday, possibly as a result of the strong up-move in the Japanese Yen.
BY Scott Rubin