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Stock market news: October 2, 2019

U.S. stocks tumbled by over a percent on Wednesday, extending Tuesday’s declines after a weak batch of economic data sparked concerns over the pace of global and domestic growth.

Here’s where the major indexes ended a rocky session as of 4 p.m. ET:

  • S&P 500 (^GSPC): -1.8%, or 52.64 points

  • Dow (^DJI): -1.9%, or 494.42 points

  • Nasdaq (^IXIC): -1.6%, or 123.44 points

  • U.S. crude oil prices (CL=F): -1.9% to $52.58 per barrel

  • 10-year Treasury yield (^TNX): -4.8 bps to 1.597%

  • Gold (GC=F): +1.08% to $1,505.10 per ounce

On Wednesday, ADP/Moody’s monthly jobs report showed private payrolls rose by 135,000 in September, marking the slowest gain since June and coming in below expectations for a gain of 140,000, according to consensus economists polled by Bloomberg. August’s headline private payrolls figure was downwardly revised to show at gain of 157,000, from a gain of 195,000 previously reported.

The new reports brought the 2019 monthly average down to 145,000, versus an average of 214,000 by this time last year. The Department of Labor will post its “official” print on U.S. payroll gains in September on Friday.

This adds to the deluge of disappointing data that sparked Tuesday’s global growth scare and risk-off session in the markets. The Institute for Supply Management on Tuesday posted a report showing U.S. manufacturing activity fell to the lowest level since June 2009 in September. This data was coupled with a print from IHS Markit showing eurozone manufacturing activity fell to the lowest since October 2012. And IHS Markit’s global manufacturing purchasing managers’ index showed the sector contracting for a fifth consecutive month.

ADP/Moody’s private payrolls report reflected this weakness in manufacturing sector employment. In production-related industries, construction jobs rose by 9,000 and manufacturing positions increased by 2,000 during the month. However, natural resources and mining jobs lost 3,000 payrolls.

“Worries over the global slowdown continue to build,” Ryan Detrick, senior market strategist at LPL Financial, wrote in an email. “Then throw in impeachment discussions and protests in Hong Kong, and we have a sell first and ask questions later market on our hands.”

Economists broadly pointed to the U.S.-China trade war as cause for the deterioration in the trade-sensitive goods-producing sector, even as President Donald Trump used the weak data to renew his attack on the Federal Reserve and call for lower rates to spur growth.

“Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019,” Timothy Fiore, chair of the ISM survey committee, said in a statement of the U.S. economic results. “Overall, sentiment this month remains cautious regarding near-term growth.”

While manufacturing activity comprises only about 11% of domestic GDP, according to a recent Goldman Sachs report, the sector’s measurable deceleration this year has become a paragon for the impact of ongoing trade tensions.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 18, 2019. REUTERS/Brendan McDermid

Independently, other portions of the domestic economy have firmed, with positive quarterly earnings results from homebuilder Lennar (LEN) on Wednesday underscoring strengthening demand in the housing market as mortgage rates decline. Last week, a 30-year fixed rate mortgage fell to 3.64%, down from 4.72% a year earlier, according to Freddie Mac. During the same period, mortgage applications rose by 8.1%, the Mortgage Bankers Association said Wednesday.

Lennar said contracts to purchase homes increased 9% during the quarter ending in August, far exceeding consensus analyst expectations for a 3.5% rise. Quarterly financial results were a beat on both the top and bottom lines, with adjusted earnings of $1.59 per share exceeding expectations for $1.32, and sales of $5.86 billion topping expectations for $5.47 billion.

“Our second quarter results benefited from both first quarter deliveries postponed by weather as well as a recovering housing market,” Lennar CEO Stuart Miller said in a statement. “The well-documented market pause in the second half of 2018 set the stage for more moderate home price increases and lower interest rates which stimulated both affordability and demand, leading homebuyers back to the market.”