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1st LD Writethru: U.S. stocks continue to drop amid weak data, car sales

Xinhua, April 2, 2015 Adjust font size:

U.S. stocks extended losses on Wednesday, as investors were assessing weaker-than-expected economic indicators and a batch of car sales.

The Dow Jones Industrial Average fell 77.94 points, or 0.44 percent, to 17,698.18. The S&P 500 lost 8.20 points, or 0.40 percent, to 2,059.69. The Nasdaq Composite Index was down 20.66 points, or 0.42 percent, to 4,880.23.

Private sector employment increased by 189,000 jobs from February to March, below expectations of a modest rise to around 225,000, according to the March ADP National Employment Report Wednesday.

"The March ADP report adds more concerns in front of Friday's payrolls, where the fallout of lower energy prices and a strengthening dollar may be finding its way to the job market. Employment strength has been cited as the factor most likely to lead inflation back toward the Fed's 2 percent target," said Jay Morelock, an economist at FTN Financial, in a note.

Meanwhile, the March manufacturing Purchasing Managers Index ( PMI) decreased 1.4 percentage points from February's reading of 52. 9 percent to 51.5 percent, the lowest level since May 2013, reported the Institute for Supply Management.

Data due through the week will be analyzed for indications on whether economic growth is strong enough to spur the U.S. Federal Reserve to begin raising interest rate sooner than expected.

A batch of monthly car sales were released Wednesday. Ford's March retail sales were up 1 percent, fleet sales were down 13 percent, and overall sales were 235,929 vehicles, down 3 percent. Its shares fell 1.43 percent to 15.91 dollars apiece.

Chevrolet, GMC, Buick and Cadillac dealers in the United States delivered 249,875 vehicles in March, down 2 percent year over year. Shares of General Motors declined 2.03 percent to 36.74 dollars apiece.

Overseas, European equities ended higher Wednesday as fresh economic reports continued to show growth in the eurozone.

Euro-area manufacturing expanded faster than initially estimated last month, as Markit's PMI hit a 10-month high in March, rising to 52.2 from 51 in February.

Asian shares closed mixed. Chinese Shanghai Composite Index surged 1.67 percent as the Chinese government announced on Tuesday that it will implement the long-awaited bank deposit insurance scheme in May. Endite