Updated from 4:08 p.m. EDTStocks in the U.S. ended lower Wednesday as a downturn in chip shares and transports more than offset the gains recorded by retailers and homebuilders. The Dow Jones Industrial Average lost 79.26 points, or 0.6%, to 13,968.05, and the S&P 500 was down 7.04 points, or 0.5%, at 1539.59. The Nasdaq was off 17.68 points, or 0.6%, at 2729.43. Leading the way lower was a 2.1% drop in the Philadelphia Stock Exchange Semiconductor Sector index. Among the weakest names was Micron ( MU), which fell 9% on the heels of its quarterly loss that was announced following the previous close. Also hurting the group were declines of 2% in Intel ( INTC) and 4% in Nvidia ( NVDA), who were started with underweight ratings at Morgan Stanley. Morgan gave the same treatment to Advanced Micro Devices ( AMD), but that stock ticked higher. The firm was kinder to Altera ( ALTR), PMC Sierra ( PMCS) and ON Semiconductor ( ONNN), upgrading each to overweight from equal weight, but the individual stocks were mixed nonetheless. Elsewhere, the Dow Jones Transportation Average surrendered 1.5%, owing to selloffs in Overseas Shipholding ( OSG), CSX ( CSX) and C.H. Robinson ( CHRW). While both the Philadelphia Housing Sector index and the S&P Retail index advanced roughly 0.9%, it wasn't enough to overcome the broader selling pressure on the market.
Earlier, Automatic Data Processing was out with its monthly survey on employment, a report that always comes two days before the government's closely watched payrolls number. The ADP data showed that nonfarm private employment rose by 58,000 workers last month, as expected, while August's growth was revised down by 11,000 to 27,000. Employment in the service sector grew by 97,000 last month, ADP said, but the goods-producing part of the economy lost 39,000 jobs. Separately, the Institute for Supply Management said its services index fell to 54.8 from 55.8 a month ago and was slightly under the 55 consensus. Investors will use the most recent figures to help them get a better gauge on the health of the economy and try to determine which way the Federal Reserve is leaning on rates. Meanwhile, another big bank laid out details of its exposure to the troubled parts of the credit market. Deutsche Bank ( DB) said it will record charges of potentially more than $3 billion related to leveraged loans, structured credit products and mortgage-backed securities. However, it still expects to post a profit of roughly $2 billion in the third quarter because of gains. Earlier this week, both Citigroup ( C) and UBS ( UBS) said they would take sizable hits because of the freeze-up in the credit markets a few weeks ago. General Motors ( GM) provided limited support for the Dow, rising 1.2% to $37.49 on word that Bank of America upgraded the stock to neutral from sell and lifted its price target by $12 to $37.
On the fixed-income side, Treasury prices were tripping. The 10-year note was down 8/32 in price, yielding 4.55%, and the 30-year bond was falling 13/32 to yield 4.80%. The greenback was mixed against other major currencies. Energy futures weakened after the government's weekly inventory numbers showed a build of 1.1 million barrels of crude in the nation's stockpiles. Analysts had been looking for a draw of 550,000 barrels. Distillate and gasoline stores fell, whereas increases had been anticipated. Oil was down 11 cents at $79.94 a barrel. Gold edged down, and silver prices rose. Stocks overseas were divided. Tokyo's Nikkei advanced 0.9%, but Hong Kong's Hang Seng slumped 2.6%. London's FTSE, Frankfurt's Dax and the Paris Cac improved.