U.S. stocks fall as energy, financial shares tumble on economy

U.S. stocks fell, dragging the Standard & Poor’s 500 Index down from a record, as financial and energy shares tumbled after oil plunged and worse-than-estimated data spurred concern over economic growth.

Bank of America Corp. and Morgan Stanley dropped more than 2.7% as financial shares tumbled the most among 10 S&P 500 groups. Energy companies sank as oil prices slid the most in more than four months after inventories climbed. An S&P gauge of homebuilders fell 3.2%, with PulteGroup Inc. slipping 4.6%. Zynga Inc. rallied 18% after saying it will introduce real-money online gambling in the U.K.

The S&P 500 fell 1% to 1,555.23 at 3:16 p.m. in New York. The Dow Jones Industrial Average lost 95.99 points, or 0.7%, to 14,566.02. The Russell 2000 Index dropped 1.4% to 921.13, extending its loss for the week to 3.2%. Trading among S&P 500 shares was 15% above the 30-day average at this time of day.

“The two data points that came in below expectations have spooked the equity markets today,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., said in a phone interview. His firm oversees about $130 billion of assets. “People are focused on Friday’s jobs report and the ADP number made investors more skittish.”

Companies boosted employment by 158,000 workers in March, figures from the Roseland, New Jersey-based ADP Research Institute showed today. The median forecast of 39 economists surveyed by Bloomberg called for a 200,000 gain.

Jobs Report

The report comes ahead of the non-farm payrolls report from the Labor Department on April 5, which may show employers hired a net 200,000 workers this month, according to the median forecast of 58 economists surveyed by Bloomberg.

The Institute for Supply Management’s index of U.S. non-manufacturing businesses, which covers almost 90% of the economy, fell to 54.4 in March from 56 in the prior month, the Tempe, Arizona-based group said today. The median forecast of 73 economists surveyed by Bloomberg was 55.5. Readings above 50 signal expansion. The survey covers industries ranging from utilities and retailing to housing, health care and finance.

U.S. benchmark equity gauges rose to their highest closes ever yesterday as concern over Europe’s debt crisis eased and U.S. factory orders topped forecasts. The S&P 500 rallied 10% in the first quarter, extending a recovery that has added more than $10 trillion of value to the world’s largest stock market, according to data compiled by Bloomberg.

Earnings Season

U.S. companies begin releasing their first-quarter earnings next week, with Alcoa Inc. scheduled to announce results on April 8. Profits among S&P 500 companies are forecast to decline 1.9% for the period, for the first retreat since 2009, according to estimates compiled by Bloomberg. In January, analysts forecast earnings growth of 1.2%. Profit expanded by 8% in the fourth quarter of 2012.

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against claims, jumped 9.8% to 14.03 today. The gauge, known as the VIX, is down 22% for the year.

Investors sold shares of companies most tied to economic growth, sending the Morgan Stanley Cyclical Index down 1.2% and the Dow Jones Transportation Index 1% lower. Intel declined 1.9% to $21.05 and General Electric retreated 1.1% to $23.08.

Commodities Plunge

Oil and metals led the S&P GSCI index of 24 commodities to fall 2%, the largest decline since November. Crude registered its biggest drop of the year, falling 2.8% to $94.45 a barrel, after a government report showed that U.S. oil stockpiles climbed to the highest level in more than 22 years. Gold futures sank 1.4%, to the lowest since June and on the brink of a bear market.

Energy companies declined 1.4% as a group. Phillips 66, the largest U.S. independent refiner by revenue since its spinoff from ConocoPhillips last year, dropped 5.9% to $62.90. Tesoro Corp., the independent petroleum refiner based in San Antonio, slid 4.8% to $52.39 and Marathon Petroleum Corp. declined 4 to $82.08.

The KBW Bank Index slumped 2% as all 24 of its members declined. Bank of America lost 3.1% to $11.77. Morgan Stanley fell 2.7% to $21.11. JPMorgan Chase & Co. slipped 2.5% to $46.77.

All of the 11 stocks in the S&P Supercomposite Homebuilding Index retreated. The ADP payroll report showed no jobs growth in the construction industry in March. The builders index has fallen 9.9% since reaching a five-year high on March 20.

KB Home, the best-performing stock among U.S. homebuilders this year, fell 5.1% to $20.10 today. PulteGroup slipped 4.6% to $18.94.

ConAgra Falls

ConAgra Foods Inc., the Omaha, Nebraska-based packaged- foods manufacturer, slipped 1.7% to $34.94 after it reported third-quarter earnings that missed analysts’ estimates. Operating profit from consumer foods fell to $284.4 million from $331.3 million for the same period a year ago.

Global Payments Inc. lost 8.9% to $44.66. The bank- card processor said revenue was $578.7 million in the three months that ended in February, compared with the average analyst estimate of $581 million.

Zynga, which makes games for Facebook Inc.’s social network, rose 18% to $3.62. The company said the two new real-money games, called “ZyngaPlusPoker” and “ZyngaPlusCasino,” will be available to players in the U.K. from today. Facebook added 2.7% to $26.11.

Bloomberg News

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