Stocks End Lower Before Jobs Report

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Leading Wednesday's economic news, the Institute for Supply Management’s non-manufacturing index for September came in at 54.8, only mildly weaker than the 55.5 reading that was expected and down one point from 55.8 in August. New orders and prices paid were modestly lower, while the employment component rebounded from a weak August reading to 52.7. The data don't indicate a recession is in the offing, CNBC said.

The U.S. ADP employment report released Wednesday said private payrolls rose 58,000 in September, slightly better than an anticipated 55,000 increase, after a downward-adjusted gain of 27,000 in August. Manufacturing jobs remained weak, falling by 22,000, and goods-producing jobs dropped by another 39,000, while service jobs rose by 97,000. Employment in the financial services sector declined for a second consecutive month. The data were in line with expectations and consistent with an increase of roughly 120,000 in nonfarm payrolls that the Bureau of Labor Statistics is expected to report on Friday, Action Economics said.

The Mortgage Bankers Association reported a 2.7% drop in its Market Composite Index, which measures mortgage loan application volume, to a seasonally adjusted 636.7 for the week ending Sept. 28, from 654.2 the previous week. The Refinance Index fell 3.8% to 1950.4 and the seasonally adjusted Purchase Index was down 1.8% to 411.4. Applications to refinance adjustable rate mortgages rose to 13.8% of total applications from 12.2% the week before.

In a volatile session for oil prices, crude oil for November delivery in New York bounced back and forth between negative and positive territory before finally ending 11 cents lower at $79.94 a barrel on Wednesday. Selling came in response to a U.S. Energy Information Administration report that showed a 1.2 million barrel increase in crude stockpiles to reach a total of 321.8 million barrels in the week ending Sept. 28, instead of the decline of 550,000 to 800,000 barrels that had been anticipated. Distillate inventories unexpectedly fell by 1.2 million barrels, where analysts had predicted a build of 1.3 million barrels.

Among stocks in the news Wednesday, Intel shares were down 2.2% after Morgan Stanley initiated analyst coverage with an underweight rating.

Micron Technology shares fell 8.9% after it reported a swing to a net loss of 21 cents a share in its fourth quarter from earnings of eight cents a share a year ago as lower gross margins offset a 4.7% increase in sales. The random access memory manufacturer said fourth-quarter and fiscal 2007 results were hurt by industry supply/demand dynamics that depressed ASPs for memory products.