US Markets

U.S. stocks plunged Wednesday, suffering their biggest drop in almost a year, as a slew of downbeat reports prompted fears the economic recovery was running out of steam. The Dow Jones Industrial Average closed down 279.65 points, or 2.2%, to 12290.14, the biggest point drop since June 4, 2010. All 30 of the blue-chip components finished in negative territory. The Standard & Poor's 500-stock index fell 30.65 points, or 2.3%, to 1314.55, dragged down by the financial, industrial and material sectors, which each fell more than 3%. Only 10 stocks in the S&P 500 finished in positive territory.

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The technology-oriented Nasdaq Composite index fell 66.11 points, or 2.3%, to 2769.19. Investors kicked off June on a negative note after several economic data points weighed on sentiment. Concerns about unemployment arose after a reading on private-sector job growth came in well below economists' expectations, fueling anxiety on Wall Street about the government's monthly jobs report on Friday. Pessimism continued to mount after the Institute for Supply Management said the manufacturing sector slowed sharply in May. U.S. auto sales also dropped in May from a month earlier, the auto industry's first significant setback in more than 18 months. The selling accelerated in the late afternoon after Moody's Investors Service again cut the rating of Greek government debt. The last time the blue-chip index dropped more than 200 points on a closing basis was March 16, which was at the height of the nuclear crisis in Japan. Financials were the S&P 500's biggest-declining sector Wednesday, dropping 3.5%. The weak private-sector jobs report points to a major obstacle to recovery for banks, given that unemployment is tied to delinquencies on mortgages and credit cards, as well as weak consumer lending. The ADP data prompted many financial institutions, including Goldman Sachs, to slash estimates for job growth ahead of the nonfarm payrolls report due Friday.

European Stocks

European stocks ended sharply lower Wednesday in the wake of disappointing U.S. data, with banks and oil producers among the decliners, while insurer Axa SA climbed after announcing plans to cut costs. The Stoxx Europe 600 index closed down 0.9% at 278.38. The trend of weak U.S. data continued Wednesday as figures showed restrained growth in private sector employment for May and the biggest one-month drop in the Institute for Supply Management's manufacturing gauge since 1984. Shares of Nokia Corp. had a volatile session, losing as much as 10% before recovering to end 0.8% lower. Brokers lined up to cut ratings, earnings per share estimates and price targets for the mobile-phone company. The stock, however, recovered most of its early losses after a report on the BGR website that the firm could sell its mobile-phone business to Microsoft Corp. Nokia later denied the report. Shares of Sweden's L.M. Ericsson AB rallied 3.2% after Australia's NBN Co. selected the company to supply wireless broadband services in a 10-year, $1.2 billion deal. Helping to pull Europe lower, some energy-related shares gave back part of the prior day's gains as crude-oil prices for July delivery slipped back below $102 a barrel. Shares of Statoil ASA fell 2.2%, and Royal Dutch Shell PLC ended down 1.5%. Shares of heavyweight Stoxx 600 constituent Swedbank AB declined 1.6% after Citigroup downgraded the stock to hold from buy. Most other bank stocks were also lower, with Commerzbank AG down 1.1% and Societe Generale down 1.7%. Bank of Ireland was a top gainer in the Stoxx 600, up 7.6%. Also in the financial sector, shares of Axa ended the day up 1.5% after the insurer released its strategic five-year plan. It is targeting a 15% adjusted return on equity in 2015 and underlying earnings per share (compound annual growth rate) of 10%. Among regional indexes, the CAC 40 index closed down 1.1% at 3,964.81, the DAX 30 fell 1% to 7,217.43, and the FTSE 100 index was also down 1%, at 5,928.61.

Asian Markets

Many Asian markets ended with small gains Wednesday after data showed Chinese manufacturing activity continued to ease in May, but not enough to raise alarms. Stocks of several regional companies that depend on Chinese demand advanced, including Australian resource producers and Japanese machinery makers. Hong Kong stocks fell to snap a six-session winning streak, led by a decline in Chinese financial and property shares. China's Shanghai Composite index ended little changed at 2,743.57, while Hong Kong's Hang Seng index slipped 0.2% to 23,626.43. The performance followed an HSBC survey showing the country's purchasing managers index for May eased to a 10-month low of 51.6 from 51.8 in April, while an official PMI gauge also slipped, to 52.0 from 52.9 in April. A measure above 50 indicates expansion, and one below implies a contraction. Elsewhere in the region, Japan's Nikkei Stock Average rose 0.3% to 9719.61, South Korea's Kospi dropped 0.1% to 2141.34, and Taiwan's Taiex added 0.8% to close at 9062.35. Among the decliners on mainland bourses, Industrial & Commercial Bank of China lost 1.8%, while Poly Real Estate Group dropped 0.8% on worries that Beijing might tighten its policy further in coming months. Chinese property and banking stocks were also broadly weaker in Hong Kong, where ICBC slid 0.3% and China Overseas Land & Investment fell 1.2%. But some stocks also advanced in the wake of the PMI data, with Komatsu rising 1.3% and Fanuc climbing 1.4% in Tokyo.

Base Metals

Base metals slid to a lower close on the London Metal Exchange Wednesday, as a weaker dollar failed to distract investors from a spate of weak economic data across the globe. Europe, India, China and the U.S. all reported lackluster manufacturing figures Wednesday, knocking confidence in the base metals, which have a range of industrial uses, including manufacturing and construction. Additionally, a U.S. payroll report showed surprisingly weak private sector hiring in May, casting a shadow over the U.S. economic recovery. LME three month copper finished the afternoon open outcry session at $9,101.50 a metric ton, down 1.2% on Tuesday's PM kerb close. Oil futures prices fell to almost $100 a barrel Wednesday, after disappointing readings on U.S. manufacturing and employment levels spurred concerns about oil demand. Light, sweet crude for July delivery settled down $2.41, or 2.4%, to $100.29 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange, which has traded above $100 a barrel since February, settled down $2.20, or 1.9%, at $114.53 a barrel. Investor demand for a safe haven pushed gold higher as traders eyed Europe's ongoing sovereign debt crisis, while lower U.S. car sales pressured platinum and palladium futures. Gold for June delivery gained $6.50, or 0.4%, to settle at $1,542.40 a troy ounce on the Comex division of the New York Mercantile Exchange. The most actively traded contract, for August delivery, was up $6.40, or 0.4%, at $1,543.20 a troy ounce.

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