* Wall Street slips on unexpected job losses
* Euro extends gains against dollar on quarter-end buying
* U.S. Treasuries gain on jobs report, quarter-end buying
* Pan-European stock index marks 4th straight qtr of gains
(Updates with mid-day U.S. markets, quarter-end comments)
By Jennifer Ablan
NEW YORK, March 31 (Reuters) - U.S. stocks dropped on
Wednesday after a private report showed an unexpected drop in
private-sector jobs, while the euro extended gains against the
dollar on quarter-end buying.
Prices of U.S. Treasuries rose as the ADP report on private
sector employment dented hopes of improvements in the economy
and as buying by fund managers to meet quarter-end needs fueled
bids.
U.S. companies cut an estimated 23,000 jobs this month, ADP
Employer Services reported. Economists had expected an increase
of 40,000 jobs, and the report sparked renewed worries about
the outlook for the labor market ahead of Friday's release of
the U.S. government's closely watched monthly payrolls report.
"The ADP report triggered some nervousness," said Tom
Sowanick, chief investment officer of the Omnivest Group in
Princeton, New Jersey. "Markets are also down because it is the
end of the quarter and some investors are locking in gains on
this last day."
Despite the weakness in U.S. stocks, the benchmark S&P 500
was on track for a fourth straight quarter of gains.
In Europe, the FTSEurofirst 300 index of top European
shares marked its fourth straight quarter of gains on
Wednesday, although the pan-European index fell on the day.
On Wall Street, sentiment was also pressured by weaker
regional manufacturing data. The Chicago Purchasing Manager's
Index showed business activity in the U.S. Midwest slipped to a
reading of 58.8 in March, below economists' expectations.
The Dow Jones industrial average <> was down 22.67
points, or 0.21 percent, at 10,884.75, while the Standard &
Poor's 500 Index <.SPX> was down 0.51 points, or 0.04 percent,
at 1,172.76. The Nasdaq Composite Index <> was up 0.81
points, or 0.03 percent, at 2,411.50.
For the quarter, the Dow is up over 4.30 percent, while the
S&P has gained 5 percent and the Nasdaq up 6.20 percent.
In March, U.S. fund managers slightly decreased their high
exposure to equities and raised their bond allocations on signs
the economic recovery continues to be slow-moving, a Reuters
poll showed on Wednesday. For more details please click on
[]
In London, the FTSEurofirst 300 index <> closed down
0.07 percent at 1,078.58 points. Financial stocks were among
the top losers. The STOXX Europe 600 banking index <.SX7P> fell
0.5 percent a day after climbing to its highest level in more
than two months.
Moody's Investors Service on Wednesday downgraded its
rating on five Greek banks, citing weakened financial strength
and pressures from the country's fiscal challenges. For details
click on [].
The MSCI world equity index <.MIWD00000PUS> was
essentially flat at 0.12 percent at 307.86, while the emerging
stocks <.MSCIEF> were up at 0.12 percent.
U.S. Treasuries rose as the ADP jobs data reduced bets on
the strength of the economy.
"This throws a bit of cold water on a barn-burner number on
Friday," said Ken Mayland, President of Clearview Economics LLC
in Pepper Pike, Ohio.
Analysts polled by Reuters forecast a 190,000 job gain in
March, which would be the second monthly increase since the
recession began in December 2007. []
On the day, the benchmark 10-year U.S. Treasury note
<US10YT=RR> was up 7/32, with the yield at 3.8315 percent,
while the two-year U.S. Treasury note <US2YT=RR> was up 2/32,
with the yield at 1.0277 percent. The 30-year U.S. Treasury
bond <US30YT=RR> was up 12/32, with the yield at 4.7228
percent.
EURO UP ON QUARTER-END BUYING
In currency markeets, the dollar hit a three-month high
against the yen and remained on track for its best quarterly
performance in a year on the view that the U.S. economy
continues to improve, despite Wednesday's jobs data.
Against the Japanese yen, the dollar <JPY=> was up 1.01
percent at 93.37 yen from a previous session close of 92.440.
Analysts expect the U.S. government's report on March
payrolls to show an increase in jobs, albeit aided by temporary
government hiring for the 2010 U.S. census.
The euro <EUR=> was up 0.87 percent at $1.3526 from a
previous session close of $1.3410. The euro extended gains
against the dollar to session peaks above $1.35, boosted
largely by quarter-end buying.
That said, traders warned euro zone fiscal worries are
likely to limit further gains.
"We could see a move higher from here, with a possible move
up to recent highs around $1.3540-50, but whether that can be
sustained is questionable as news out of Europe is still pretty
bad," said Brian Dolan, chief currency strategist at Forex.com
in Bedminster, New Jersey.
The dollar was down against a basket of major
trading-partner currencies, with the U.S. Dollar Index <.DXY>
down 0.60 percent at 80.985 from a previous session close of
81.470.
In energy and commodities prices, U.S. light sweet crude
oil <CLc1> rose 85 cents, or 1.03 percent, to $83.22 per
barrel, while spot gold prices <XAU=> rose $11.75, or 1.07
percent, to $1114.30. The Reuters/Jefferies CRB Index <.CRB>
was down 0.40 points, or 0.15 percent, at 273.32.
(Additional reporting by Steven C. Johnson in New York;
Editing by Leslie Adler)
