Stocks Snap 4-Day Rally Ahead of Jobs Report
Stocks kicked off September with a weak start, finishing near session lows in volatile trading, following a handful of mixed economic news and as investors waited for the government's monthly jobs report on Friday.
The Dow Jones Industrial Average tumbled 119.96 points, or 1.03 percent, to finish at 11,493.57, led by BofA and JPMorgan .
Cisco was the only gainer on the blue-chip index.
The S&P 500 fell 14.47 points, or 1.19 percent, to close at 1,204.42.
The Nasdaq declined 33.42 points, or 1.30 percent, to end at 2,546.04. The CBOE Volatility Index, widely considered the best gauge of fear in the market, was near 32.
All 10 S&P sectors traded lower, led by financials and industrials.
Stocks posted a four-day rally in the previous session, but despite the gains, all three major indexes still logged their worst month since last May. The major averages also logged their worst August in 10 years.
September is historically the worst month for the markets and one of the two months of the year where the Dow has averaged a decline (the other being May).
“There’s no real bullish conviction in this market and a lot of it has to do with tomorrow’s jobs numbers,” Peter Costa, president of Empire Execution told CNBC. “I’m on the light side tomorrow—the jobs report is not going to come in that good and we’ll see a substantial selloff.”
Investors are focusing on Friday's non-farm payrolls figure. Economists expect the number to have risen 75,000 in August, according to a Reuters poll, after gaining 117,000 in the previous month. The unemployment rate is seen steady at 9.1 percent.
Meanwhile, Goldman Sachs slashed their forecast to 25,000 from 50,000, citing weakness in online job postings in recent months.
Among financials, Goldman Sachs declined after the bank, along with two other firms, agreed with the New York banking regulator to end the practice known as robo-signing. Meanwhile, ISI downgraded the bankto "hold" from "buy."
Rivals Morgan Stanley and Citigroup also slumped.
Meanwhile, Bank of New York Mellon CEO Robert Kelly is being fired for an abrasive management style, according to people familiar with the matter.
IBM is buying Toronto-based risk analytics software firm Algorithmics for $387 million in cash to enhance its financial services capabilities.
Also on the tech front, U.S. judge ruled that Oracle's $1.3 billion verdict against SAP was "grossly excessive," adding that the maximum actual damage proved by Oracle is $272 million. Both stocks declined.
General Motors and Ford dipped after both automakers said its monthly U.S. auto sales gained, but came in slightly lower than expected. Meanwhile, Toyota slid after the Japanese automaker reported that sales plunged 13 percent amid weakness across nearly all models.
Meanwhile, retailers reported mixed monthly chain-store sales results. The final figure, based on 23 retailers, showed that sales rose 4.4 percent in August, just below the 4.6 percent gain that analysts expected. Macy's and Costco were among the biggest gainers. Meanwhile, JCPenney and TJX slipped after both retailers missed estimates.
The U.S. government sued to block AT&T's $39 billion purchase of T-Mobile USA, citing concerns it will harm competition in the wireless market and lead to higher prices.
Trading volume was on the lighter side with the consolidated tape of the NYSE at 4.05 billion shares, while 1.02 billion shares changed hands on the floor ahead of a holiday weekend.
On the economic front, the ISM manufacturing index for August ticked lower, but came in better than what economists expected.
New claims for unemployment benefits fellslightly in the previous week, according to the Labor Department.
Meanwhile, revised second quarter productivity tumbled more than expected. And construction spending fell, according to the Commerce Department.
In Europe, manufacturing contracted more than expected in August, sending the purchasing managers index for the sector to a two-month low.
—Follow JeeYeon Park on Twitter: twitter.com/JeeYeonParkCNBC—
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