When hiring slumps, so do stock prices.
That was the message investors sent Wednesday, when they ignored flashes of positive news about the economy and instead homed in on troubling reports about jobs in the U.S. and Europe.
The Dow Jones industrial average fell as much as 87 points after a company that tracks payrolls said the U.S. added far fewer jobs in April than in March. The Dow ended the day down 10.75 points, at 13,268.57.
It was a turn from the day before, when investors chose to focus on a couple of positive reports on U.S. manufacturing and sent the Dow up 66 points to its highest close in more than four years.
While the market's day-to-day fluctuations may be difficult to predict, some investors say they're certain stocks will generally climb for the rest of the year. As justification, they cite strong first-quarter earnings.
Of the 330 companies on the S&P 500 that have reported first-quarter earnings, 77 percent have beaten the estimates of stock analysts, said John Butters, senior earnings analyst at FactSet, a provider of financial data.
"The market has room to run," said Karyn Cavanaugh, market strategist with ING Investment Management in New York. "It doesn't always go up in a straight line."
The Standard & Poor's 500 fell 3.51 points to 1,402.31. The Nasdaq composite index was the outlier. It fell throughout the morning, then finished up 9.41 points at 3,059.85.
The report on private sector hiring weighed on investors, who see jobs as the key ingredient to an economic recovery.
The payroll processor, ADP, said U.S. businesses added 119,000 jobs in April, down from 201,000 in March. The government releases its monthly figures, which include the public sector, on Friday. The two reports can vary sharply.
Another job report from Europe underscored the gravity of the continuing debt crisis there. The 17 countries that use the euro reported that unemployment rose to 10.9 percent in March, the highest since the euro launched in 1999.
Markets fell across most of Europe, including Germany and Greece.
There was also good news out of Europe, even if it didn't seem to sway investors. Standard & Poor's lifted Greece's credit rating out of default, noting how the country had recently secured a massive writedown on its debt to private investors.
Germany also reported that the number of people seeking work in April slipped below 3 million, a psychologically important barrier that it hasn't broken in that month for two decades.
Todd Salamone, director of research for Schaeffer's Investment Research in Cincinnati, downplayed concerns about Europe. Investors have had a long time to digest any bad news and shouldn't be too shaken by daily developments, even if the headlines seem panicky, he said.