US stocks fell on Wednesday in the final session of the second quarter as a report on private-sector jobs disappointed investors and Moody's warned that it may cut its credit rating on Spain. Alcoa, Walt Disney and Hewlett-Packard were among the decliners.
The Dow Jones Industrial Average dropped 96.28 points (0.98%) to 9,774.02. The Dow fell 3.58% for the month, its second-consecutive monthly drop. For the quarter, it tumbled 9.97%, breaking a streak of four quarterly gains and marking the measure's worst second-quarter since 2002.
Alcoa was the Dow's worst performer in the quarter with a 29% drop. The aluminium giant was also the Dow's worst performer on Wednesday with a slide of 28 cents (2.7%) to $10.06. Not far behind it, Walt Disney declined 80 cents (2.5%) to $31.50, and H-P slid $1.02 (2.3%) to $43.28.
3M was the only Dow component that managed to end Wednesday's session in the black, as the industrial giant was lifted by a better-than-expected report on Chicago-area manufacturing. 3M eked out a gain of 50 cents (0.6%) to $78.99.
The Nasdaq Composite lost 25.94 (1.21%) to 2,109.24. The measure fell 6.55% for the month and dropped 12.04% in the second quarter, its worst quarterly performance since the fourth quarter of 2008.
The Standard & Poor's 500 slipped 10.53 (1.01%) to 1,030.71, on Wednesday, reaching a fresh 2010 closing low. All of the measure's sectors ended the session in negative territory, with the technology sector hit the hardest while industrials lagged.
For June, the S&P 500 fell 5.39%. The consumer-discretionary sector was the S&P 500's worst performer for the month.
The materials sector had the biggest percentage decline for the quarter. Anadarko Petroleum had the biggest percentage decline among the measure's 500 components this quarter; it slid 50%, weighed down by the April 20 explosion of the Deepwater Horizon rig and the resulting oil spill.
Wednesday's stock declines came as a report from Automatic Data Processing showed private-sector jobs in the US increased by 13,000 last month, less than the gain of 60,000 jobs expected by economists.
Also weighing on market sentiment, Moody's Investors Service put Spain's Aaa credit rating on review for a possible downgrade, citing flagging economic prospects, challenging fiscal targets and rising funding costs.
Celgene fell $2.42 (4.6%) to $50.82, after the company agreed to acquire Abraxis BioScience for at least $2.9bn in cash and stock, broadening its cancer-drug portfolio. Abraxis, whose primary treatment is Abraxane, a breast cancer injection approved in the US and Europe, surged $12.89 (21%) to $74.20.
General Mills fell $1.38 (3.7%) to $35.52, after the packaged-food giant posted a 41% drop in fiscal fourth-quarter profit on higher costs and lower sales. The company also forecast earnings for the new year below analysts' projections. The results also weighed on fellow packaged-food company Kellogg, which slid $1.45 (2.8%) to $50.30.
Ford Motor climbed 20 cents (2%) to $10.08, after the car maker said it is reducing its debt by more than $4bn, a sign the company remains confident in its own turnaround despite a softening car market in the US.
BP PLC's American depositary shares rose $1.21 (4.4%) to $28.88, as rising speculation of potential deal activity had investors increasingly viewing the oil giant's assets, and possibly the company as a whole, as an acquisition target. Russian oil major TNK-BP Ltd., which is jointly owned by BP and a group of Russian businessmen, said it would be interested in buying assets from its UK shareholder as a platform for international expansion.
For Australian ADRs listed on the NYSE, BHP Billiton fell $1.38 (2.18%) to US$61.99, Rio Tinto Plc weakened $1.82 (4.01%) to US$43.60, ResMed gained 28 cents (0.46%) to US$60.81, Telstra Corporation dropped 1 cent (0.07%) to US$13.69, Telecom Corporation of NZ shed 3 cents (0.46%) to US$6.44 and Westpac increased 8 cents (0.09%) to US$88.58.
At 7:45 AM (AEST), the 10-year Treasury note yield was 2.93% and the five year yield was 1.77%.
European shares ended the day and month lower on Wednesday, dragged down by losses for miners following a weaker-than-expected reading on US employment in the private sector.
After hitting 245.55 earlier in Wednesday's session, the Stoxx Europe 600 closed off 0.5 at 243.32, off 0.3% for the day and 7.8% for the quarter.
Worries about US growth resurfaced on Wednesday afternoon in Europe, after a survey of ADP payrolls data showed private-sector job gains in June totalling just 13,000, far below estimates of 60,000. The data come ahead of the government's pivotal report nonfarm payrolls on Friday. Copper and platinum futures fell after the data, and shares of miners followed suit.
Bank-sector fears receded somewhat. The catalyst was a low take-up at the European Central Bank's three-month tender auction, with EUR131.9bn allotted to lenders. Deutsche Bank shares traded up 1.9% in Frankfurt as BNP Paribas rose 1.9% in Paris.
At the regional level, the German DAX index rose 0.2% to 5,965.52, while the UK's FTSE 100 index added 0.05% to 4,916.87 and the French CAC-40 index moved up 0.3% to 3,442.89.
BP shares gained on Wednesday in London, rallying 5%. An oil industry analyst explored a merger and acquisition "fantasy" in which Exxon Mobil Corp., run by CEO Rex Tillerson, offers to buy BP in 2011. The analyst also mentioned Royal Dutch Shell, down 0.6%, as a possible bidder for BP.
Anadarko Petroleum Corp. approved aspects of the design of the Deepwater Horizon rig, a paper reported late on Tuesday, citing executives.
Anadarko, which owns 25% of the Macondo well spewing oil into the Gulf of Mexico, has been trying to distance itself from BP after the explosion, the report said.
On the FTSE 100, Rio Tinto lost 79.50 pence (2.61%) to 2,968.50 pence and BHP Billiton dipped 17.50 pence (0.99%) to 1,754.50 pence.
Asian stock markets ended mostly lower as worries over a possible Chinese economic slowdown and the impact of the yen's recent strength damped confidence and prompted a further sell-off in banks and exporters.
Japan's Nikkei Stock Average finished 2.0% lower, while Hong Kong's Hang Seng Index shed 0.6% and China's Shanghai Composite Index lost 1.2%.
New Zealand shares ended at a 11-month low, tracking weak offshore cues and weighed by losses in dual-listed stocks as risk aversion again dominated the market. The NZX-50 Index closed down 0.6%, or 18.98 points lower, at 2,972.09. This is the lowest close since July 24, 2009, when it closed at 2,961.17.
Base metals on the London Metal Exchange rebounded after a choppy day of trading, and analysts said they are expecting similarly volatile conditions in the days ahead as macroeconomic news dictates market direction. Aluminium rose $10 (0.51%) to $1,965 while copper fell $40 (0.62%) to $6,450 and nickel firmed $440 (2.29%) to $19,650. Zinc remained unchanged at $1,765 and lead added $25 (1.45%) to $1,745. Comex copper was last quoted at 291.00 US cents per pound.
Gold futures finished with a small gain after a European Central Bank tender ended up having a mixed impact on the metal. Spot gold was last quoted at $1,241.60. Comex gold futures advanced $3.50 (0.28%) to $1,245.90. Spot silver was last quoted at $18.55.
Crude-oil fell on higher-than-expected product inventory levels and signs of continued weak demand. West Texas Intermediate was last quoted at US$75.63 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.8173 euros, 88.36 yen, 1.190 AUD and 66.92 pence.