* U.S., European stocks decline
* Oil slides below $108 as U.S. stockpiles swell
* U.S. private-sector employment, services data disappoint
* Investors await ECB and BOJ meetings, U.S. payrolls data
By Wanfeng Zhou
NEW YORK, April 3 Major stock markets and the
dollar fell on Wednesday after unexpectedly weak growth in U.S.
private-sector jobs and services dented optimism about the
world's largest economy.
Crude prices slumped more than 2 percent as oil stockpiles
swelled in the United States, the top oil consumer, where a
struggling economy is limiting demand for fuel.
U.S. companies hired at the slowest pace in five months in
March as recent strong demand for construction jobs evaporated,
according to a private-sector report. Separate data showed the
pace of growth in the vast U.S. services sector slowed last
The data sparked concern that the recent pick-up in U.S.
economic growth is losing momentum and injected caution among
investors ahead of Friday's all-important government report on
employment for March.
"The softer-than-expected figure adds further support to our
long-held view that the U.S. economy would slow towards
mid-year, seeing sub-2 percent GDP growth in the second
quarter," said Andrew Grantham, economist at CIBC World Markets
in Toronto. "This is a negative for stocks and the U.S. dollar,
but a positive for fixed income."
Analysts polled by Reuters forecast U.S. nonfarm payrolls
grew by 200,000 in March, with the unemployment rate seen
holding steady at 7.7 percent.
The MSCI world stocks index slipped 0.5
percent to 358.26.
Wall Street stocks fell, though the S&P 500 index remained
close to its all-time intraday high.
"There are risks out there, but we've been creeping up
quietly for a long time with an impressive cumulative gain, and
that will continue so long as we don't have a crisis in the
offing," said David Kelly, chief market strategist for JPMorgan
Funds in New York.
The Dow Jones industrial average dropped 60.82
points, or 0.41 percent, to 14,601.19. The Standard & Poor's 500
Index shed 10.27 points, or 0.65 percent, to 1,559.98.
The Nasdaq Composite Index fell 18.37 points, or 0.56
percent, to 3,236.49.
European shares lost 0.9 percent to close at
1,193.30 points, a day after surging 1.3 percent, as the weak
U.S. data stoked worries that global economic growth would
struggle to justify recent stock market gains.
OIL RETREATS AS SUPPLY BUILDS
The dollar index, which measures the greenback versus
a basket of currencies, dropped 0.2 percent to 82.724.
The euro rose 0.2 percent to $1.2845, while against
the yen the dollar fell 0.5 percent, to 92.95 yen.
The European Central Bank and the Bank of Japan are both
expected to make monetary policy announcements on Thursday.
Analysts said a recent run of weak euro zone data, political
turmoil in Italy, and concerns over Cyprus could lead ECB
President Mario Draghi to strike a dovish tone in his comments
after the meeting.
The BOJ is widely expected to ramp up its bond buying and
extend the maturities of the bonds it purchases, although some
traders have pared back bets against the yen given already hefty
"There's some event risk associated with the (BOJ)
announcement. The concerns over Europe have also intensified as
economic data continue to reflect recessionary conditions
there," said Michael Woolfolk, senior currency strategist at BNY
Mellon in New York.
Expectations of further easing drove Japan's Nikkei stocks
average up 3 percent on Wednesday for its biggest
one-day rise in almost two months.
The benchmark 10-year U.S. Treasury note was up 9/32, with
the yield at 1.8296 percent.
Brent shed $2.78 to trade at $107.91 a barrel, while
U.S crude slid $2.21 to $94.98.
Crude oil stocks in the United States rose by 2.7 million
barrels last week, according to the U.S. Energy Information
Agency, versus expectations of a 2.2 million barrel build.
Further pressure came from concern a prolonged oil pipeline
outage in the U.S. Midwest would cause inventories to build up
near the delivery point of the benchmark contract in Cushing,