US Stocks Skid on Concerns About Slow Hiring; Retailers Drop

Technology companies and retailers are down, while high-dividend stocks are slipping in response to a jump in bond yields

U.S. stocks are taking broad losses Thursday as investors react to mounting evidence that hiring has slowed down based on a report from payroll processor ADP. Health care and technology companies are taking sharp losses. Retailers are falling after L Brands, the parent company of Victoria's Secret, reported weak sales in June.

Keeping Score
The Standard & Poor's 500 index dropped 17 points, or 0.7 percent, to 2,415 as of 3:05 p.m. Eastern time. The Dow Jones industrial average fell 116 points, or 0.5 percent, to 21,361. The Nasdaq composite sank 48 points, or 0.8 percent, to 6,102. The Russell 2000 index of smaller-company stocks shed 14 points, or 1 percent, to 1,405.

Private U.S. businesses added 158,000 jobs in June, according to payroll processor ADP. Hiring has slowed down in recent months as the number of unemployed people has stayed near historic lows. The government will give a report on public and private job growth on Friday. As investors wondered if economic growth will stay sluggish, consumer-focused companies and technology firms took sharp losses.

"We were expecting a significantly higher growth rate in the second quarter," said Krishna Memani, chief investment officer at Oppenheimer Fund. "It's not panning out that way."

Secret's Out
L Brands said its sales fell 6 percent in June as the company continues to struggle with the effects of ending its swimwear business. Sales at stores open at least a year dropped 9 percent. The stock gave up $5.73, or 10.6 percent, to $48.38, by far the largest loss of any S&P 500 company. Other retailers also dropped. Athletic apparel maker Under Armour fell 74 cents, or 3.3 percent, to $21.40 and Hanesbrands shed 51 cents, or 2.2 percent, to $22.67. Signet Jewelers lost $1.87, or 2.9 percent, to $62.66.

The parent company of QVC will buy the Home Shopping Network for about $2.6 billion in stock. Liberty Interactive said it will value QVC at $40.36 a share in the deal. It already had a 38 percent stake in HSN, which jumped $8.37, or 26.8 percent, to $39.67. Liberty Interactive fell 31 cents, or 1.3 percent, to $24.15.

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Technology companies, which edged higher on Wednesday, turned lower again. Apple sank $1.23 to $142.86 and Facebook dropped $1.72, or 1.1 percent, to $148.62. Electronic storage company Seagate Technology retreated $1.96, or 5 percent, to $37.06.

Health care companies also struggled. Biotech drugmaker Amgen declined $2.03, or 1.2 percent, to $172.23 and Celgene dipped $1.49, or 1.1 percent, to $131.71. Merck was down 75 cents, or 1.2 percent, to $68.25 after it said it is stopping two studies of its cancer drug Keytruda as a treatment for multiple myeloma. Merck more patients who were treated with Keytruda died, and the Food and Drug Administration halted the studies because the risks of a treatment that included Keytruda outweighed the potential benefits.

Global leaders arrived in Hamburg, Germany, for the G-20 summit as the U.S. and South Korea continued to respond to North Korea's recent missile test. On Thursday, South Korean jets and navy ships fired missiles into the ocean during drills, a display of military power two days after North Korea test-launched its first intercontinental ballistic missile. The VIX, a measurement of how much volatility investors expect, climbed 11 percent to 12.28, although that is still a relatively low level.

Bond prices skidded. The yield on the 10-year Treasury note rose to 2.37 percent from 2.33 percent. That helped banks, as higher bond yields mean higher interest rates and larger profits from lending. Investors sold shares of big-dividend stocks like real estate investment trusts and telecommunications companies, as the rising bond yields made those stocks less appealing to investors seeking income.

Benchmark U.S. crude oil rose 81 cents, or 1.8 percent, to $45.94 a barrel in New York. Brent crude, used to price international oils, added 82 cents, or 1.7 percent, to $48.61 per barrel in London.

The dollar fell to 113.15 yen from 113.35 yen. The euro rose to $1.1396 from $1.1340.

Germany's DAX fell 1 percent and The CAC 40 in France was 1 percent lower as well. The British FTSE 100 index lost 0.5 percent. Japan's Nikkei 225 fell 0.4 percent and the Kospi in South Korea edged down less than 0.1 percent. The Hang Seng of Hong Kong shed 0.2 percent.

Copyright AP - Associated Press
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