The broad indices all saw 1% declines after Automated Data Processing said private sector nonfarm employment in the U.S. grew by 158,000 in March, declining from an upwardly revised 237,000 in February. ADP also lowered its January private sector employment growth number to 177,000 from 215,000.
Economists polled by Thomson Reuters had estimated the ADP figure for March would show 200,000 new jobs being added. ADP said there were no new construction jobs added during March and, on a net basis, "average monthly gains of 29,000 in the three months prior." ADP also said that manufacturing employment grew by 6,000 during March.
Moody's Analytics chief economist Mark Zandi said in a press release, "Construction employment gains paused as the rebuilding surge in the wake of Superstorm Sandy ended," in March, and "anticipation of Health Care Reform may also be weighing on employment at companies with close to 50 employees."The theme of slowing service-sector growth was underlined by a drop of the Institute for Supply Management's non-manufacturing index to 54.4% in March from 56.0% in February. An index reading above 50% indicates economic expansion. Economists were expecting the ISM non-manufacturing index reading for March to be 55.8% The KBW Bank Index (I:BKX) was down 2% to close at 54.68, with all 24 index components showing declines for the session. Stocks of major banks showing 3% declines included Bank of America (BAC), with shares closing at $11.81, and State Street (STT), which closed at $56.92.