US STOCKS-S&P 500 lower after private-sector jobs data
* ADP employment misses forecast, factory orders drop
* Euro zone manufacturing slips
* Chesapeake Energy shares tumble 13 pct
* Dow off 0.1 pct, S&P off 0.2 pct, Nasdaq up 0.4 pct
By Edward Krudy
NEW YORK, May 2 (Reuters) - The S&P 500 and the Dow fell on Wednesday as data showed private sector hiring slowed in April, sparking concerns that monthly payrolls numbers on Friday will be weaker than forecast.
U.S. private employers added 119,000 jobs in April, well short of expectations for 177,000, according to the ADP report. That sparked rumors that Friday's payrolls data will show the economy added just 125,000 to 150,000 jobs last month, well below a Reuters consensus forecast for 170,000.
"If fewer and fewer people are participating in this recovery it suggests underlying weakness that we have to address, and so far policy makers' answers have been easy credit, I think we need to go beyond that," said Jack Ablin, chief investment officer, Harris Private Bank in Chicago.
The report came on the heels of more glum news from Europe. Euro zone factories faltered last month as the purchasing managers index, seen as a measure of how the economy will fare, fell to its lowest since June 2009.
Energy was the worst performer among the 10 major S&P sectors, weighed down by a 12.4 percent drop in Chesapeake Energy Corp to $17.18. The S&P energy index lost 1.6 percent, and Chesapeake was the most actively traded stock on the New York Stock Exchange.
The Dow Jones industrial average dipped 9.57 points, or 0.07 percent, to 13,269.75. The Standard & Poor's 500 Index fell 2.48 points, or 0.18 percent, to 1,403.34. The Nasdaq Composite Index added 10.78 points, or 0.35 percent, to 3,061.22.
Although the Dow broke out to new four year highs on Tuesday after strong manufacturing data, the S&P 500 once again struggled to move above the 1,400 mark, a resistance level it has struggled with for weeks. Still, the S&P is up 11 percent for the year.
Adding to the negative tone, new orders for U.S. factory goods in March recorded their biggest decline in three years, even as they came in slightly above forecasts.
"What the market needs is a sign that the economy is not getting worse. Yes, the growth is slow but it's still there," said Ralph Edwards, director of derivatives sales and trading at ITG in New York.
Helping the Nasdaq, Intel Corp's stocks continued to march higher, making new 52 week highs. Traders see continued flows into large cap stocks as a bullish sign. Many investors consider the stock, up 1 percent to $29.23, to be undervalued.
Home builders as measured by the Dow Jones homebuilder index rose to nearly four year highs. Traders cited a spat between two democratic Congressmen and the Federal Housing Finance Agency on forgiving mortgage principal as a sign that calls for such measures could gain traction.
Shares in PulteGroup Inc, the No. 2 U.S. homebuilder, rose 3.8 percent to $10.41.
CVS Caremark Corp was up 3 percent to $46.06 after the drugstore operator and pharmacy benefits manager posted a sharp rise in first-quarter sales and raised its profit forecast.
American Eagle Outfitters Inc jumped 15.1 percent to $20.61 as the teen clothing retailer raised its profit forecast.
Of the 350 S&P 500 companies reporting results through Wednesday morning, 70 percent have topped analysts' estimates, according to Thomson Reuters data.
Women's clothing retailer Ascena Retail Group Inc will buy Charming Shoppes Inc in an all-cash deal. Charming surged 23.7 percent to $7.30 as the most actively traded Nasdaq stock and Ascena gained 10.3 percent to $21.02.
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