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U.S. equities slammed on mixed data, Fed stance, Spain; Dow off 0.95%

Published 04/04/2012, 04:07 PM
Updated 04/04/2012, 04:09 PM
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Investing.com - U.S. stocks plunged  once again Tuesday, as a weak Spanish bond auction combined with the Fed`s anti monetary easing stance to create a risk off atmosphere. 

At the close of U.S. trade, the Dow Jones Industrial Average gave back 0.95%, the S&P 500 dropped 1.02%, while the Nasdaq Composite was slammed 1.46%. 

Igniting the risk off flight,  yesterday the Federal Reserve revealed in its meeting minutes that it is holding off from increasing monetary easing, unless prices climb at a rate slower than its 2% target.

Dampening the enthusiasm for stocks, the Institute of Supply Management said its non-manufacturing purchasing manager's index declined by 1.3 points to 56.0 last month from a reading of 57.3 in February.  

Analysts had expected the index to decline by 0.3 points to 57.0 in March.

Earlier in the day, payrolls processing firm ADP reported that the U.S. private sector added 209,000 jobs last month, outstripping expectations for an increase of 200,000.

February’s figure was revised up to a gain of 230,000 from a previously reported increase of 216,000.

This report is thought to be a precursor to the official numbers that are released on Friday.

Meanwhile, Spain sold EUR2.6 billion of bonds, near the minimum target and borrowing costs increased in its first auction.

Spain had set a range of EUR2.5 billion to EUR3.5 billion for the sale.
In additional euro zone news, the ECB kept its interest rate unchanged at the record low of 1%.

Contraction continues in the euro zone with retail sales declining 0.1% and a purchasing managers composite index fell from 49.3 to 49.1 in March weighing on equities.

However, on the bullish front, Germany factory orders increased 0.3% but still missed the 1.5% increase forecasted by analysts.

Micron plunged 3.6% on the mixed economic numbers, as investors dumped shares tied to economic growth.

Banks also retreated with Bank of America and JP Morgan giving back over 2% on the session.

WebMD Health Corp sank 9.7% as it announced a stock buy back.

At the close European trade, the EURO STOXX 50 fell 2.46%, France's CAC 40 dropped 2.74%, while Germany’s DAX traded lower by 2.84%. 

Meanwhile, in the U.K. the FTSE 100 gave back 2.30%.
Traders are awaiting German industrial production, The Bank of England`s interest rate and statement, as well as U.S. unemployment claims on Thursday.





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