Stocks declined Wednesday, the last trading day of the quarter, after an unexpected drop in the ADP jobs report and a ratings downgrade on several Greek banks.
The Dow was down about 20 points in morning trading, led by Boeing .
Intel and Chevron were among the gainers.
ADP said employers slashed 23,000 jobsfrom payrolls in March, which came as a surprise to economists, who had expected to 50,000 jobs were added last month.
The ADP report is closely watched ahead of the government's jobs report on Friday. Economists currently expect that report to show 200,000 jobs were added to nonfarm payrolls in March. And, that report could still show job growth, largely due to heavy hiring of government workers to conduct the Census.
"This was a shocker that should raise some questions about Friday’s employment report," Joel Naroff of Naroff Economic Advisors, said of the ADP report. He still expects to see an average of 50,000 to 75,000 jobs added per month this year, but cautioned that it may not accelerate.
"We could see a short term pop in private sector job growth in the spring and summer similar to the swing we have seen in inventories," Naroff said. "Firms that have needed workers but refused to hire will start doing that. But once they add those workers, they may not be in any mood to hire any more."
Stocks added to their losses after a report showed Midwest manufacturing activity is sluggish. The Chicago Purchasing Manager's Index dropped to 58.5 in a March reading from 62.6 in February. New orders were down but production ramped up.
Stocks pared their losses somewhat after a subsequent report showed nationwide factory orders rose 0.6 percent in February, double the expected increase.
The major averages are about to wrap up their second consecutive month of gains and their fourth consecutive quarter of advances. The Dow and the S&P 500 are also likely to register their best first quarters in a decade.
But investors need to adjust their expectations, Pimco's Bill Gross said on CNBC this morning.
"[I]nstead of 8 to 10 percent in terms of return for risk assets, you should expect 4 to 6 percent," Gross said. "Reduce your expectations."
Across the pond, Moody's downgraded its credit rating on five Greek banks, including National Bank of Greece
This comes amid news that Greece will issue a U.S. dollar-denominated bondin late April or early May.
Still to come: Fed Governor Elizabeth Duke and Atlanta Fed President Dennis Lockhart are both scheduled to give speeches at 12:30 pm at separate events. Late Tuesday, Dallas Fed President Richard Fisher said the U.S. economic recovery is on good footing, but this is not yet the time to sell assets or hike interest rates.
Chevron shares rose after the oil giant won a three-year old arbitration fight in Ecuador.
Honeywell shares rose more than 1 percent after the company, which makes everything from air purifiers to plane-navigation systems, raised its first-quarter profit outlook. Bloggingstocks said expect Honeywell, which also makes thermostats, to take off as it capitalizes on homeowners' desire to maximize the energy efficiency of their homes.
Rite Aid shares tumbled after the drugstore reported a worse-than-expected loss after a mild cold and flu season and projected its full-year loss would widen as well.
Dollar stores continued to do well: Dollar General beat earnings expectations and projected a 4-to-6-percent increase in same-store sales this year.
After the bell today, the latest quarter numbers from Blackberry maker Research In Motion and Micron Technology will be released.
In auto news, Ford is planning an electric car of its own, using Microsoft technology.
Auto makers are slated to release March sales numbers on Thursday.
Baker Hughes was also in the news, as it finalizes an agreement with the Department of Justice that will allow its planned takeover of rival BJ Services to proceed.
Blockbuster shares skidded after billionaire investor Carl Icahn slashed his stake in the company, selling more than 13 million shares.
The IPO of Primerica, the door-to-door insurance unit of Citigroup, is expected to price tonight. The company set the expected range between $12 and $14. The move is expected to boost Citigroup .
Still to Come:
WEDNESDAY: Fed ends mortgage-buyback, TALF programs; Chicago PMI; factory orders; weekly crude inventories; Fed's Lockhart speaks; Feinberg speaks; Earnings from Research In Motion
THURSDAY: March auto sales; Challenger job-cuts report; weekly jobless claims; construction spending; ISM manufacturing index
FRIDAY: March jobs report; Stock market closed in observance of Good Friday; Bond market closes at noon
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