* 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 U.S. markets close)
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 "is not a good sign; we want to see some job
growth," Sasha Kostadinov, portfolio manager at Shaker
Investments in Cleveland. "Friday's jobs data is going to be a
big number because people are starting to get anxious to see
some growth."
Tom Sowanick, chief investment officer of the Omnivest
Group in Princeton, New Jersey, noted that "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
posted its fourth straight quarter of gains, rising 4.9
percent.
In Europe, the FTSEurofirst 300 index of top European
shares also marked a 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 .DJI> was down 50.79
points, or 0.47 percent, at 10,856.63, while the Standard &
Poor's 500 Index .SPX> was down 3.84 points, or 0.33 percent,
at 1,169.43. The Nasdaq Composite Index .IXIC> was down 12.73
points, or 0.53 percent, at 2,397.96.
For the quarter, the Dow rose 4.1 percent and the Nasdaq
was up 5.7 percent.
In London, the FTSEurofirst 300 index .FTEU3> closed down
0.07 percent at 1,078.58 points. The index was up 3.1 percent
for the first quarter.
Financial stocks were among the top losers on Wednesay. 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 ID:nLDE62U1JZ.
The MSCI world equity index .MIWD00000PUS ended slightly
lower, down 0.04 percent at 307.36, while the emerging stocks
.MSCIEF> were up at 0.21 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. ID:nN29205959
On the day, the benchmark 10-year U.S. Treasury note
US10YT=RR was up 6/32, with the yield at 3.83 percent, while
the 2-year U.S. Treasury note US2YT=RR was up 2/32, with the
yield at 1.02 percent.
The 30-year U.S. Treasury bond US30YT=RR was up 15/32, with
the yield at 4.72 percent.
EURO UP ON QUARTER-END BUYING
In currency markets, 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 1.13
percent at 93.48 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 0.74 percent at $1.3509 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.
"Expect range bound movement until summer with the wild
card being Greece," said Joseph Trevisani, chief market analyst
at FX Solutions in Saddle River, New Jersey. "The dollar is
still the safe-haven currency and the euro will remain weak
until the Greek problems is settled or their debt rollover in
April and May is completed and accepted by the market. If there
is any contagion, the dollar will soar."
The dollar was down against a basket of major
trading-partner currencies, with the U.S. Dollar Index .DXY>
down 0.48 percent at 81.079 from a previous session close of
81.470.
In energy and commodities prices, U.S. light sweet crude
oil CLc1> rose 92 cents, or 1.12 percent, to $83.29 per barrel,
while spot gold prices XAU=> rose $10.30, or 0.93 percent, to
$1112.90. The Reuters/Jefferies CRB Index .CRB> was down 0.38
points, or 0.14 percent, at 273.34.
(Additional reporting by Steven C. Johnson in New York;
Editing by Leslie Adler)
