By Ryan Vlastelica
NEW YORK (Reuters) - U.S. stocks fell on Wednesday as a pair of weaker-than-expected economic indicators raised concerns that Friday's impending jobs report could also point to worsening conditions.
In the first session of the second quarter, some of the day's biggest losers were in the sectors that were the strongest during the first quarter. The S&P health care sector <.SPXHC> fell 1.6 percent; it was the strongest sector in the first quarter, up 6.2 percent. The consumer discretionary index <.SPLRCD>, another big first-quarter gainer, fell 0.9 percent.
The ADP National Employment Report showed that U.S. private employers added 189,000 jobs last month, well below economists' expectations for 225,000 jobs. Separately, the pace of U.S. manufacturing growth fell in March to its slowest in almost two years, according to the Institute for Supply Management.
The reports precede Friday's jobs data, the most widely watched indicator of the week, though that arrives on Good Friday when the stock market will be closed. The inability of market participants to trade off that report could generate some volatility going into the holiday.
"The correlation between ADP and the payroll report isn't terribly strong, but given the size of the miss, this could cause investors to pause and reassess the landscape," said David Lebovitz, global market strategist for J.P. Morgan Asset Management in New York.
Data due through the week will be studied for indications on whether economic growth is brisk enough to spur the U.S. Federal Reserve to begin raising interest rates sooner than expected.
"Markets have been trading sideways, with the S&P having difficulty breaking above 2,100, but bad news could become good news if that means the Fed will hold off on raising rates a bit longer," Lebovitz said.
Sears Holdings Corp (O:SHLD) rose 5.8 percent to $43.79 after it said it would raise more than $2.5 billion by selling stores to a real estate investment trust it is setting up, in the latest move to shore up its finances.
Macerich Co (N:MAC) fell 5.1 percent to $80 after Simon Property Group (N:SPG) withdrew its offer to buy the company. Shares of Simon rose 0.6 percent to $196.79.
The S&P energy index <.SPNY> rose 0.8 percent as crude oil
The Dow Jones industrial average (DJI) fell 77.84 points, or 0.44 percent, to 17,698.28, the S&P 500 (SPX) lost 7.96 points, or 0.38 percent, to 2,059.93 and the Nasdaq Composite (IXIC) dropped 27.77 points, or 0.57 percent, to 4,873.11.
Advancing issues outnumbered declining ones on the NYSE by 1,554 to 1,331, for a 1.17-to-1 ratio; on the Nasdaq, 1,470 issues fell and 1,035 advanced for a 1.42-to-1 ratio.
The benchmark S&P 500 index was posting 3 new 52-week highs and 4 new lows; the Nasdaq Composite was recording 28 new highs and 35 new lows.