US stocks sink over poor labor, services data

US stocks have dropped sharply with benchmark indexes covering their worst session in over a month, following weak reports on hiring and service industries.

On Wednesday, the Dow Jones Industrial Average fell 111 points (0.8 percent) to close at 14,550.35, the Wall Street Journal MarketWatch reported.

The Standard & Poor’s 500 Index shed 16.56 points (1.1 percent) to 1,5553.69, while the Nasdaq Composite Index slipped 36.26 (1.1 percent) to 3,218.60.

US benchmark indexes posted their biggest drop since February 25, after poor labor-market data in advance of Friday’s nonfarm payrolls report.

This came as unemployment claims jumped to 385,000 last week, with private companies adding only 158,000 payrolls in March – a much slower pace than forecasted.

“If you stack up economic data over the last few days, a handful have disappointed, including today,” said Art Hogan, a market expert.

The economic recovery showed signs of hitting a dry spell as US companies decreased hiring to its weakest pace in five months in March, and growth in the services sector slowed.

A poor US manufacturing reading also suggested that the economy has lost some momentum.

US President Barack Obama signed a bill on March 26, making permanent USD 85 billion in sequester cuts, which will slash billions of dollars from programs helping those in poverty, including housing assistance, pre-school education, nutrition benefits, and many other such state-provided privileges.