Updated from 1:57 p.m. ET with market close information and comment from House Financial Services Committee chairman Jeb Hensarling (R., Texas).
NEW YORK ( TheStreet) -- Several of the nation's largest banks saw their shares slide on Wednesday, following a disappointing employment report for April.
Shares of Bank of America (BAC) recovered a bit from earlier losses, closing at $12.14, down 1.4% for the session.The broad indices all ended with 1% declines, following the release of employment growth numbers for April by Automated Data Processing, which provided a disappointing setup to the Labor Department's monthly report on nonfarm payrolls on Friday. Private sector employment in the U.S. grew by 119,000 jobs in April, declining from 131,000 in March, according to the ADP National Employment Report, produced in collaboration with Moody's. The March number was revised downward from 158,000. Economists polled by Thomson Reuters estimated the April employment growth number would come in at 150,000. "Goods-producing employment rose by 6,000 jobs in April, its slowest pace of growth in seven months," ADP said in its press release. The number of manufacturing jobs declined by 10,000 during April, for the first decline in the category in three months, and the largest decline since September. The payroll processor also said that in April, "service-providing jobs increased by 113,000, the weakest pace of growth in seven months."
On a brighter note, ADP said "though it accounted for most of the weakness in goods production job growth in March, construction growth picked up in April and the industry added 15,000 jobs over the month." "Job growth appears to be slowing in response to very significant fiscal headwinds," Moody's chief economist Mark Zandi said in the press release, adding that "tax increases and government spending cuts are beginning to hit the job market. Job growth has slowed across all industries and most significantly among companies that employ between 20 and 499 workers." The "fiscal headwinds" include defense budget cuts, some of which were caused by federal budget sequestration beginning March 1, that include mandatory budget cuts of $85.4 billion for fiscal 2013. The major tax increase this year is the end of the temporary 2% reduction in the Social Security payroll tax.
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