A batch of discouraging economic news deepened investors' concerns about corporate earnings, pulling major U.S. stock indexes down on Wednesday for the second day in a row.
The modest slide cut the Standard & Poor's 500 index's gain for the year to less than one-tenth of a percent. Oil prices surged above $50 a barrel on signs that U.S. production growth is slowing.
Payroll processor ADP said U.S. companies added fewer jobs last month than economists had expected, while an index of manufacturing activity declined for the fifth month in a row. In addition, the government said U.S. construction spending fell in February.
"The data show we definitely hit a bit of a slowdown in the first quarter, and now investors are getting worried about the upcoming earnings reports," said Chris Gaffney, a senior market strategist at EverBank Wealth Management.
Many of the stocks that fell the most on Wednesday were also some of the biggest gainers during the first three months of the year. The health care sector notched the biggest decline in the S&P 500. Even so, it's up 4.8 percent this year, leading the nine other sectors in the index.
"We've had a long, good run by the equity markets and, at times, investors look for opportunities to maybe take some gains off the table," Gaffney said.
The Dow Jones industrial average fell 77.94 points, or 0.4 percent, to 17,698.18. The 30-company index was down as much as 191 points. It's down 0.7 percent for the year.
The S&P 500 index slid 8.16 points, or 0.4 percent, to 2,059.69. The index is now up 0.04 percent for the year.
The Nasdaq composite lost 20.66 points, or 0.4 percent, to 4,880.23. The tech-heavy index ended is up about 3 percent this year.
Half of the 10 sectors in the S&P 500 fell. Telecommunications services led among the gainers, rising 0.8 percent.
Macerich fell the most in the index, sliding $5.60, or 6.6 percent, to $78.73. The company slumped after rival Simon Property Group called off its hostile $16.8 billion takeover bid for the shopping mall operator.
Investors have been weighing mixed economic data this week in advance of the next round of corporate earnings, which begins next week.
On Tuesday, they got a dash of encouraging data on consumer confidence, spending and home prices. But Wednesday's slate clouded the economic picture.
ADP said U.S. companies added a seasonally adjusted 189,000 jobs last month. That was below market expectations for an increase of around 250,000. Also, the Institute for Supply Management's U.S. manufacturing index slipped in March, reflecting slower growth in factory orders. U.S. construction spending declined in February for the second month in a row.
It's likely the weak ADP jobs report prompted some traders to make moves on Wednesday in anticipation that the government's March payroll employment tally will also be discouraging. That report is due out Friday, but U.S. markets will be closed for the Good Friday holiday.
Earnings for companies in the S&P 500 index are expected to be down 3.1 percent overall, according to S&P Capital IQ. Investors have reduced expectations for corporate earnings due to concerns over the impact falling oil prices and a strong dollar may have on big companies. The dollar has strengthened by about 9 percent so far this year.
"We think the second quarter probably won't look very good as well," said James Liu, Global Market Strategist for J.P. Morgan Asset Management. "The hope is that by the third and fourth quarters, these two big effects with the U.S. dollar and oil will have stabilized, and so you'll see a bounce back in earnings at that point."
The price of oil rose sharply Wednesday on signs that U.S. production growth is slowing, a weaker dollar that makes oil a more attractive investment to overseas buyers, and anticipation that a delay in talks with Iran over its nuclear program could keep Iranian oil off the world market.
Benchmark U.S. crude rose $2.49 to close at $50.09 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.99 to close at $57.10 in London.
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 1.86 percent from 1.93 percent late Tuesday.
In metals trading, gold rose $25 to $1,208.10 an ounce, silver rose 46 cents to $17.06 an ounce and copper edged down less than a penny to $2.75 a pound.
In other futures trading on the NYMEX:
— Wholesale gasoline rose 6.1 cents to close at $1.831 a gallon.
— Heating oil rose 3.9 cents to close at $1.747 a gallon.
— Natural gas fell 3.5 cents to close at $2.605 per 1,000 cubic feet.