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A cautious stance by investors ahead of the Government’s payroll report on top of a mixed bag of economic reports dragged the benchmarks down for the second-consecutive day. Additionally, retail bellwethers such as Target, Macy’s, and Costco reported dismal sales for April, further dampening investor sentiment. Corporate earnings were also disappointing, adding to the gloom.

The Dow Jones Industrial Average (DJI) was down 0.5% to 13,206.59 and further retreaded from its late-2007 high, a level which had been achieved last Tuesday. The Standard & Poor 500 (S&P 500) slid 0.8% to finish yesterday’s trading session at 1,391.57. The tech-laden Nasdaq Composite Index suffered the most as it plunged 1.2% to close at 3,024.30. Consolidated volumes on the New York Stock Exchange, the Nasdaq and American Stock Exchange were 6.9 billion shares, marginally higher than the daily average of roughly 6.76 billion. Declining stocks easily outpaced the advancers on the NYSE, as for seven stocks that traded down, only three stocks moved higher.

What weighed on the investors’ sentiment is the apprehension over the nature of nonfarm payroll data, scheduled for release on Friday. Investors had received a jolt when, on Wednesday, Automatic Data Processing, Inc.’s (NASDAQ:ADP) National Employment Report revealed that U.S. nonfarm private business sector added only 119,000 jobs in April, far lower than expectations of an addition of 177,000 jobs. Following this report, expectations took a downturn and it is now believed that nonfarm payroll data will show additions of 125,000 to 150,000 jobs as against 170,000 job additions estimated by Reuters.

These apprehensions were further intensified following a mixed bag of economic data. The Institute for Supply Management released data suggesting that the massive U.S. services sector had slowed more than expected for the month of April. According to the report, the NMI dropped 2.5 percentage points from March to 53.5% in April. A reading above 50% indicates expansion for the non-manufacturing components of the economy, but the drop suggested a slower pace of expansion, even lower than expectations. Consensus estimates had projected a reading of 55.1%.

The initial claims report was the only major bright spot yesterday. The U.S. Department of Labor reported that the advance figure for seasonally adjusted initial claims had dropped 27,000 from the previous week's revised figure of 392,000 to 365,000 for the week ending April 28. The sharp decline in initial claims was higher than consensus estimates of a drop to 376, 000.

Concerns were not restricted to the economic data alone as big retailers added to the gloom following a less-than-expected same-store sales report. Consequently bellwethers like Costco Wholesale Corporation (NASDAQ:COST), Target Corp. (NYSE:TGT), Gap Inc. (NYSE:GPS), Saks Incorporated (NYSE:SKS) dropped 2.8%, 2.5%, 1.6% and 0.9%, respectively. Macy's, Inc. (NYSE:M) managed gains of 0.7%, but along with Costco, Macy’s April performance was the worst since 2009.

Corporate earnings failed to provide any relief with companies including General Motors Company (NYSE:GM), Cablevision Systems Corporation (NYSE:CVC) and Health Net, Inc. (NYSE:HNT) releasing disappointing quarterly figures. Shares of these companies plunged 2.4%, 7.9% and 24.9%, respectively. Meanwhile, Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) suffered the second-largest decline in the Nasdaq 100, dropping 47.8% after missing second-quarter 2012 sales estimates. This was the company’s second miss in three quarters and it downwardly revised its fiscal 2012 outlook.

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