* 158,000 private jobs added in June vs estimated 185,000
* Jobless claims rise for third straight week
* Tesla slips after Model S fails to ace some tests
* Dow down 0.73 pct, S&P 500 down 0.93 pct, Nasdaq down 1
(Updates to close)
By Chuck Mikolajczak
July 6 (Reuters) – U.S. stocks were sharply lower on
Thursday after disappointing labor market data clashed with the
possibility of a more hawkish Federal Reserve, while rising
tensions in the Korean peninsula providing additional pressure.
Private employers added 158,000 jobs in June, the ADP
National Employment Report showed, coming in below the estimated
gain of 185,000 and suggesting cooling in the U.S. labor market
as it nears full employment.
Another set of data showed weekly jobless claims rose for
the third straight week, climbing to 248,000 and topping the
While the data still indicates a tight labor market, the
reports hint at a soft monthly nonfarm payrolls report on
Friday, which includes hiring in both the public and private
The softer data comes on the heels of Wednesday’s release of
the minutes from the Federal Reserve’s June meeting, which
showed policymakers were increasingly split on the inflation
outlook and how it might affect the pace of interest rate
Those two factors helped push yields on U.S. Treasuries
higher and dampened the attractiveness of equities.
“ADP came in pretty soft, people got a little nervous
there,” said Anthony Conroy, president of Abel Noser in New
“People said the Fed is pretty uneasy over low inflation but
they are still going to keep doing what they are doing with
rates because they have to do something.”
Geopolitical tensions also weighed on sentiment, with U.S.
President Donald Trump vowing on Thursday to confront North
Korea “very strongly” following its latest missile test and
urging nations to show Pyongyang that there would be
consequences for its weapons program.
The Dow Jones Industrial Average fell 158.13 points,
or 0.74 percent, to 21,320.04, the S&P 500 lost 22.79
points, or 0.94 percent, to 2,409.75 and the Nasdaq Composite
dropped 61.39 points, or 1 percent, to 6,089.46.
The declines marked the biggest percentage drop for the S&P
500 in since May 17.
Shares of Tesla dropped 5.56 percent after the
luxury electric carmaker’s Model S did not receive the top score
in certain tests by the Insurance Institute for Highway Safety.
General Electric lost 3.80 percent as the worst
performer on the Dow after the European Commission accused the
company of providing misleading information during a merger
L Brands plunged 14.08 percent, the worst performer
on the S&P 500, after the Victoria’s Secret owner’s June sales
came in below expectations.
Declining issues outnumbered advancing ones on the NYSE by a
3.12-to-1 ratio; on Nasdaq, a 2.35-to-1 ratio favored decliners.
About 6.66 billion shares changed hands in U.S. exchanges,
compared with the 7.18 billion daily average over the last 20
(Reporting by Chuck Mikolajczak; Editing by Dan Grebler)