U.S. stocks slumped on Wednesday, marking the biggest decline since August, as weaker-than-expected reports on ADP private sector employment and ISM manufacturing raised concerns about the current economic soft patch.
The S&P 500 Index was down 30.65 points, or 2.28 percent, at 1,314.55. The Dow Jones Industrial Average was down 279.65 points, or 2.22 percent, at 12,290.14. The Nasdaq Composite Index plunged 2.33 percent.
Economic data on Wednesday was disappointing. The ADP employment report showed that U.S. private employers added 38,000 jobs in May, the lowest level since September 2010, compared with downwardly revised figure of 177,000 jobs in April, while markets had expected a gain of 178,00 jobs in May.
The Institute of Supply Management (ISM) Manufacturing Index, which measures the amount of manufacturing activity that occurred in the previous month, declined to 53.50 in May compared to 60.40 in April, while analysts expected a reading of 57.50. The key employment index declined to 58.2 in May compared to 62.7 reported in the previous month.
An index of national factory activity fell more than expected in May to its lowest level since September 2009.
All the 30 blue-chip components on Dow ended in negative territory. Alcoa, Bank of America and Caterpillar plunged more than 4.2 percent, while American Express, JP Morgan, Boeing and American Express declined more than 3 percent.
Fears of Greek default remain despite Germany’s softer stance, the US budget deficit and debt ceiling looms in the coming month.