Both of Tuesday’s economic reports turned out to be duds.  The March ADP National Employment Report was a big miss, with only 158,000 jobs added, compared with economists’ expectations of 200,000 new jobs.  The March ISM Non-Manufacturing Index fell to 54.4 percent from February’s 56 percent.

As a result of the disappointing economic news, the Dow Jones Industrial Average (NYSEARCA:DIA) dropped by 111 points, closing at 14,550 for a loss of 0.76 percent.

The S&P 500 (NYSEARCA:SPY) sank 1.05 percent to close at 1553.69.

The Nasdaq 100 (NASDAQ:QQQ) fell 0.91 percent while the Russell 2000 (NYSEARCA:IWM) took the hardest fall with a loss of 1.67 percent.

In other major markets, oil (NYSEARCA:USO) was one of the biggest losers, sinking 2.57 percent to close at $33.76.

On London’s ICE Futures Europe Exchange, May futures for Brent crude oil  advanced by $3.41 (3.09 percent) to $107.12/bbl. (NYSEARCA:BNO).

April Gold Futures sank by $18.00 (1.14 percent) to $1,557.10 per ounce following Tuesday’s bearish report on the yellow metal from Société Générale (NYSEARCA:GLD).

Transports were down with the Dow Jones Transportation Index (NYSEARCA:IYT) losing 1.42 percent.

European markets saw red numbers everywhere, while Japan’s Nikkei 225 Stock Average jumped by nearly 3 percent.  China was a tad in the red despite positive PMI data.

Technical indicators point to an overbought market with declining momentum near significant long term resistance lines.  The S&P 500 MACD has now dipped below the signal line, suggesting a further decline.

For the day, major sectors finished mostly in the red with the energy and financial sectors taking the hardest hit as a result of the downbeat ISM data on both the manufacturing and service sectors.

Consumer Discretionary (NYSEARCA:XLY):  -0.92%

Technology:  (NYSEARCA:XLK):  -0.79%

Industrials (NYSEARCA:XLI):  -0.61%

Materials: (NYSEARCA:XLB):  -0.83%

Energy (NYSEARCA:XLE):  -1.92%

Financials: (NYSEARCA:XLF):  -1.54%

Utilities (NYSEARCA:XLU):  -0.28%

Health Care: (NYSEARCA:XLV):  -0.62%

Consumer Staples (NYSEARCA:XLP):  -1.05%

Tomorrow brings the Department of Labor’s weekly report on initial unemployment claims.

Bottom line:  Wednesday’s downbeat economic reports gave investors a good scare as to what the budget sequester might have in store for the second quarter economy. 

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