Stocks gave back some of their recent gains Wednesday after a disappointing jobs report stoked worry about the strength of the economic recovery as a highly contagious variant of the coronavirus spreads.
The S&P 500 fell 0.46%, easing back from the all-time high the benchmark index set a day earlier. Crude oil prices fell more than 3% and pushed energy companies lower. Industrial firms, banks, retailers, hotels and other companies that rely on direct consumer spending also fell. Those losses outweighed gains in technology and communication stocks.
The S&P 500 fell 20.49 points to 4,402.66. The Dow Jones Industrial Average dropped 323.73 points, or 0.9%, to 34,792.67. The Nasdaq composite added 19.24 points, or 0.1%, to 14,780.53. The Dow and Nasdaq each hit all-time highs just last week.
Payroll processor ADP revealed a disappointing snapshot of the nation's employment recovery, adding to concerns about the lagging recovery in the jobs market. ADP said the private sector added 330,000 jobs in July, falling far short of economists' expectations. The report was issued ahead of the Labor Department's more comprehensive July jobs report on Friday.
"You're getting some mixed signals, certainly, but we think we'll get some good growth and the underlying economy is pretty good," said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.
The recovery in the jobs market likely will continue to be bumpy, but it's on track to continue improving over the long term, he said.
Stocks have been choppy this week as investors continue to pore over corporate earnings reports while reviewing economic data for clues as to how the economic recovery is going.
Wednesday's jobs survey from ADP raised doubts that Friday's broader July report will exceed expectations. Economists are projecting that U.S. employers added 700,000 jobs last month, and that the national unemployment rate slipped to 5.7% from 5.9%, according to FactSet.
That outlook is now likely too optimistic, because of the sudden resurgence in coronavirus cases as the delta variant spreads, Brad McMillan, chief investment officer for Commonwealth Financial Network, wrote Wednesday.
And if Friday's job report shows a similar shortfall as the ADP survey, that "would signal that the job recovery has slowed, at a minimum," McMillan wrote.
Traders also weighed an encouraging report on growth in the services sector, which makes up the bulk of the U.S. economy. The Institute for Supply Management reported that in July the sector grew at its fastest pace since the survey started in 2008.
Bond yields mostly recovered from an early slip after the release of the report. The yield on the 10-year Treasury note dropped to 1.16%, down from 1.17% late Tuesday. It dipped as low as 1.13% in early trading.
Investors also are still in the thick of corporate earnings season. The results have been solid so far. Roughly 75% of companies in the S&P 500 have turned in their earnings and the majority have been surprisingly good.
Strong profit and revenue results weren't enough to lift stocks for many companies on Wednesday, however. General Motors fell 8.9% despite overcoming an industrywide chip shortage to beat analysts' profit expectations and raise its forecast. CVS Health slipped 2.9% after also reporting solid results.
Ticket seller and concert promoter Live Nation rose 1.5% after reporting surprisingly mild second-quarter loss. Cruise line operator Royal Caribbean Group slid 2.5% after its latest quarterly results fell short of analysts' expectations.