U.S. stocks fell for the third day in a row as energy companies tumbled along with the price of crude oil. Investors also sold high-dividend stocks as bond yields rose.
Crude oil prices fell 5%, their biggest drop in more than a year, after the government reported a big buildup in fuel stockpiles.
A survey by payroll company ADP showed that private companies added the most jobs in three years in February, a sign of stronger economic growth. That helped send bond prices lower and yields higher. The report showed big increases in construction and manufacturing hiring.
According to industry measurements and government data, manufacturing and business investment have improved in the last few months after a steep slump. However, investors have longed for evidence manufacturing and construction companies were bringing on more workers, and there wasn't much of that until Wednesday.
"It's not surprising that you would start to see the hiring improve in that sector," said Katie Nixon, chief investment officer for Northern Trust. "It's been a drag on economic growth the last couple of years."
The Standard & Poor's 500 index slipped 5.41 points, or 0.2%, to 2,362.98. The Dow Jones industrial average fell 69.03 points, or 0.3%, to 20,855.73. The Nasdaq composite rose 3.62 points, or 0.1%, to 5,836.55 as healthcare and technology companies moved up.
Bond prices dropped. The yield on the 10-year Treasury note jumped to 2.56% from 2.52%.
Federal Reserve policymakers will meet next week, and investors expect the central bank to raise interest rates for the first time since December. Nixon says long-term bond yields could reach roughly 3% in a few months.
Stocks that pay big dividends, such as utilities and real estate investment trusts, are often compared to bonds because of their hefty payments to shareholders. When bond yields rise, investors often sell those stocks so they can buy bonds instead. High-dividend companies also fall out of favor when Wall Street expects faster economic growth. Utility holding company PG&E fell 1.7% to $65.16 and Realty Income dropped 3.6% to $57.70.
The Energy Information Administration said oil reserves grew by 8 million barrels last week, far more than analysts expected. Benchmark U.S. crude sank 5.4% to $50.28 a barrel, its lowest price since late November. Brent crude, used to price international oils, fell 5% to $53.11 a barrel.
Energy stocks are already lagging behind the overall the market in 2017, and on Wednesday the 13 biggest losers among S&P 500 companies all came from the energy industry. Marathon Oil sank 8.7% to $14.87 and Devon Energy slid 6.5% to $40.72.
Almost three-fourths of the stocks on the New York Stock Exchange finished lower as some sectors that might have been expected to rise on the prospect of faster economic growth missed out on the day's gains.
Banks, which have skyrocketed since the election, finished little changed despite the jump in bond yields. Industrial companies declined. Caterpillar fell 2.8% to $93.23 as a government investigation into its taxes and accounting remained in the news. Smaller, domestically focused companies also fell, as the Russell 2000 index of small-company stocks fell 8.84 points, or 0.6%, to 1,366.04.
Medical device and equipment makers moved up slightly, and biotechnology companies bounced partway back from sharp losses a day earlier. Investors worried about price limits or cuts after President Trump tweeted that he is working on a plan to reduce prices. The Nasdaq Biotechnology index rose 0.9% on Wednesday, following a 1.5% loss Tuesday.
Snap rose 6.4% to $22.81 as the Snapchat app maker recovered some of its losses from the last two days. It has experienced some steep ups and downs since its stock-market debut last week.
The dollar rose to 114.42 yen from 114.05 yen. The euro slipped to $1.0548 from $1.0568.
Wholesale gasoline fell 3 cents to $1.65 a gallon. Heating oil fell 6 cents to $1.56 a gallon. Natural gas rose 8 cents to $2.90 per 1,000 cubic feet.
Gold fell $6.70 to $1,209.40 an ounce. Silver fell 24 cents to $17.30 an ounce. Copper fell 2 cents to $2.60 a pound.
The French CAC 40 rose 0.1% and the DAX in German was little changed. The FTSE 100 in Britain lost 0.1%. Tokyo's Nikkei 225 index shed 0.5% and in Hong Kong the Hang Seng advanced 0.4%. The Kospi in South Korea was unchanged.
2:50 p.m.: This article was updated with closing prices, context and analyst comments.