The Dow fell into the red Wednesday following four consecutive sessions of gains. Disappointing economic data concerned investors as most sectors other than financials moved lower. 

In economic news, a report revealed private-sector employers cut 371,000 jobs in July. While it was the smallest monthly figure since October, it was still higher than expected.

Meanwhile, a service sector index demonstrated larger than expected contraction during July. The Institute for Supply Management’s non-manufacturing index fell to 46.4 in July following a reading of 47 the previous month. The forecast was for a reading of 48.

Finally, a Commerce Department report showed factory orders had increased 0.4% in June. This was well ahead of the 0.8% decline economists had forecast. 

The Dow Jones dropped 39.22 points, or 0.42%, to 9,280.97, the S&P's 500 shed 2.95 points, or 0.29%, to 1,002.70 and the NASDAQ lost 18.26 points, or 0.91%, to 1,993.05.

Bank of America and Wells Fargo jumped 6.5% and 5.7%, while Citigroup surged 10.2%.

JPMorgan, Goldman Sachs and Morgan Stanley added 3.9%, 2.1% and 3.3% respectively.

American International Group spiked 62.7% ahead of the beginning of Robert Benmosche's term as CEO on Monday. Berkshire Hathaway gained 4.5%.

American Express put on 5.8%.

Procter & Gamble shed 2.8% after reporting a decine in revenue. However, the consumer goods company did report profits ahead of expectations.

Kraft Foods shares were flat depsite recording an 11% rise in profit. Whole Foods spiked 15.6% after the organic and gourmet foods supermarket chain reported a better than expected profit result and a rise in sales during the thrid quarter.

Energy stocks slipped as the governemt reported a 1.7 million barrel rise in crude supplies last week. Forecasts were for a 1.5 million barrel climb.

Chevron, Exxon Mobil and ConocoPhillips lost between 0.6% and 0.9%.

NYMEX light crude oil for September delivery settled up US55c at US$71.97 a barrel.

Most tech stocks lost ground. IBM, Apple and Oracle shed 0.9%, 0.3% and 2.1% respectively.

Hewlett-Packard and Google dipped 0.4% and 0.6%, while Microsoft and Yahoo! bucked the trend with 0.2% and 1.1% gains.

COMEX gold for December delivery fell US$3.40 to US$966.30 an ounce.

European Markets

European stocks closed lower on concerns surrounding the US service sector witnessing larger than expected contraction. Resource stocks struggled as the financials countered with strong gains.

The UK benchmark FTSE 100 lost 24.24, or 0.52% to 4,647.13. The German DAX fell 64.01, or 1.18% to 5,353.01, while the French CAC40 dipped 17.84, or 0.51% to 3,458.53.

Among the biggest declines were energy stocks. Royal Dutch Shell, BG Group and BP shed 3.9%, 3.6% and 1.4%.

Total lost 0.8%.

Miners were also hit hard despite a rise in the metals prices. Xstrata and Antofagasta dropped 0.9% and 1%.

Aussie miners Rio Tinto and BHP Billiton slid 1.8% and 2.2%, while Anglo American added 1.1%.

Lloyds led the financials higher with a 10.6% climb. Commerzbank, Barclays and Standard Chartered put on 3.4%, 2.4% and 3.2%.

Societe Generale and Royal Bank of Scotland jumped 6% and 4.4%. 

BNP Paribas and Deutsche Bank dipped 2.1% and 1.4%.

Insurers Prudential, Allianz and AXA rose 5.6%, 2.6% and 1.7% respectively.

Car makers Renault and Peugeot slid 2.3% and 2.2%.

Japanese Markets

The Nikkei’s rally came to an end following 13 successive days in positive territory. Automakers led the fall in what was a bleak day across the board.

The benchmark Nikkei 225 shed 122.48 points, or 1.18%, to 10,252.53.

Automakers fell victim to profit taking. Yamaha sank 5.3%, while Nissan and Honda dropped 1.9% and 1.3%.

Toyota slid 1.2% after reporting its third consecutive quarterly loss.

Car parts maker Denso and tyremaker Bridgestone fell 5.6% and 2.2%.

Light duty truck maker Isuzu weakened 4.7% following a 55% drop in first quarter sales.

Fast Retailing fell 3.5% following a fall in same-store sales at a particular clothing chain for the first time in nine months.

Nikon Corp lost 2.8% before the camera maker reported an unexpected quarterly profit after the close.

Trading house Mitsui & Co added 1.9% following a broker upgrade.

Hong Kong Markets

The Hang Seng fell for second day in a row Wednesday. Property stocks continued to be a source of weakness as home sales dipped.

The Hang Seng fell 301.66, or 1.45% to 20,494.77.

Bank of China fell 2.9%, while China’s number two lender ICBC sank 1.8%. HSBC, which rose over 5% yesterday, dropped back 0.7%.

Hong Kong’s number one developer, Sun Hung Kai Properties slumped 4.7%. Henderson Land Development almost matched it, sinking 4.6%.

New World Development was 4.4% below the line as the overall property index on the Hang Seng retreated 2.7%.

Cathay Pacific fell 3.6% despite posting an unexpected profit in the first six months of the year.

Hong Kong Aircraft Engineering slumped 8%.