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Dow Little Changed as Service Sector Job Growth Hits Lowest Level in a Year

NEW YORK (TheStreet) -- U.S. stocks fell Thursday as jobs growth in the service sector hit its lowest level in a year and unemployment claims rose.

  • The S&P 500 closed off 0.11% to 1,888.75 while the Dow Jones Industrial Average finished unchanged at 16,572.42. The Nasdaq dropped 0.91% to 4,237.74.
  • Initial jobless claims for the week of March 29 increased by 16,000 to 326,000, vs. the average economist's estimate of 317,000. The four-week moving average ticked up by 250. The February U.S. trade deficit arrived at $42.3 billion, compared with the expected deficit of $38.5 billion.
  • U.S. services sector growth accelerated in March, according to Markit, but the pace of employment weakened to its slowest in a year. The final service sector purchasing managers' index rose to 55.3 in March from 53.3 in February. The service sector accounts for about three-quarters of the U.S. labor market, with employers adding workers at the slowest rate since March 2013. The final employment index was at 51.8 in March against 51.9 in February.
  • The Institute for Supply Management said its non-manufacturing index rose to 53.1 in March from 51.6 in February. Expectations had been for a result of 53.3. Of the 18 industries tracked by ISM, 13 reported growth last month while five contracted.
  • The European Central Bank kept the benchmark interest rate unchanged at a record low of 0.25%, as expected. While the ECB did not stimulate the economy by opting for a negative deposit rate, traders noted that its policy statement appeared to take a step closer to adopting quantitative easing.
  • Major international markets were mostly higher. The UK FTSE 100 was off 0.22%, the DAX in Germany was rising 0.06%, the Hong Kong Hang Seng closed up 0.18%, and the Nikkei 225 settled ahead by 0.84%.
  • In corporate news, Google's unusual stock split is taking effect on Thursday. The new Class "C" shares will trade under its historic stock ticker (GOOG), while the Class A shares will trade under the new stock ticker (GOOGL). Class A shares gained 0.6%, while Class "C" shares added 0.48.
  • Juniper Networks (JNPR) increased 1.7% after the company said it expects to reduce its global headcount by about 6% and that it will incur estimated cash charges of about $35 million for the move during the fiscal 2014 first quarter.
  • E*Trade (ETFC - Get Report) was the biggest percentage decliner in the S&P 500, off 6.5%.Other notable losers included Vertex Pharmaceuticals (VRTX - Get Report) and Biogen (BIIB), down 4.4% and 2.5%, respectively.
  • Anadarko Pertroleum jumped to an all time high and closed at the biggest winner on the S&P 500, popping 14.5%.

-- By Jane Searle, Andrea Tse and Joe Deaux in New York

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Chart of I:DJI
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