MARKET SNAPSHOT: U.S. Stocks End Choppy Day Down

By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market finished a choppy trading day on Wednesday generally lower with blue-chips falling the most, as investors reacted mildly to mostly disappointing economic reports.

The main indexes traded in a narrow range after a big rally on Tuesday which sent the S&P 500 and the Russell 2000 to record levels.

The S&P 500 (SPX) finished roughly where it closed on Tuesday, down less than a point at 1,873.81 with the energy sector hit the most. The Dow Jones Industrial Average (DJI) dropped 35.70 points, or 0.2%, to 16,360.18. The Nasdaq Composite (RIXF) closed in positive territory, gaining 6 points, or 0.1%, to 4,357.97, the highest level since April 2000.

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"Investors are ignoring current economic reports because it is impossible to tell how much the cold and snowy weather was a factor in continued weakness," said Kate Warne, investment strategist at Edward Jones.

"After a big relief rally on Tuesday, markets are taking a pause and are likely to muddle through until the official jobs report on Friday," she added.

According to the Federal Reserve's Beige Book U.S. economic conditions in January and early February were difficult to discern due to severe cold weather. In sector after sector and region after region, the weather wreaked havoc on conditions, the report said.

Before the bell, a report from Automatic Data Processing showed the private sector added fewer jobs than expected as severe winter weather continued to affect hiring. Private-sector employers added 139,000 jobs last month, up from 127,000 in January, but down from 205,000 in February 2013, according to ADP.

After the open, a survey of executives showed U.S. service-sector companies expanded in February at a sharply slower pace, and bad weather was only part of the problem. The Institute for Supply Management said its nonmanufacturing index dropped to 51.6% last month from 54% in January. That was well below the 53% forecast of economists surveyed by MarketWatch.

The employment gauge tumbled nearly 9 points to 47.5%, marking the lowest level since March 2010 as severe weather hindered hiring in some sectors such as construction and wholesale trade.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote that the ADP report was weak, but distorted by the impact of the soft January official data, which was reduced. He also said that the drop in the employment component in the ISM nonmanufacturing report appears to signal very soft payrolls.

Smith & Wesson surges, HCI Group drops

Among individual stocks, shares of (SWB) jumped 16% after the gun maker topped Wall Street's forecasts and raised its estimates for the year late Tuesday.

Brown-Forman Corp. (BFA) posted a 5% sales rise and lifted its full-year earnings per share view. Shares in the liquor and winemaker rose 3.7%.

PetSmart Inc. (PETM)(PETM) shares fell 1.5% after fourth-quarter earnings fell by less than expected.

Hovnanian Enterprises Inc. (HOV) shares were down 10% after quarterly results missed expectations.

HCI Group Inc. (HCI) shares fell 19% after the insurer posted earnings late Tuesday.

In overseas markets, Europe's benchmark stock index moved lower on Wednesday, pulling back after its biggest rally in eight months. The benchmark Stoxx Europe 600 index finished down 0.2%.

Asian stocks had a mixed session. The Nikkei 225 index rose 1.2%, but the China Shanghai Composite fell 0.9%. At the start of China's annual meeting of the legislature, the National People's Congress, officials said the government will hold its economic growth target at 7.5% in 2014, showing no change from 2012 or 2013.

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