* Private employers added 205,000 jobs in Jan. vs est 195,000
* Comcast rises; biggest boost to S&P 500, Nasdaq
* Match Group slumps after revenue misses estimates
* Indexes down: Dow 0.56 pct, S&P 0.98 pct, Nasdaq 1.31 pct (Adds details, changes comment, updates prices)
By Tanya Agrawal
Feb 3 (Reuters) - U.S. stocks gave up early gains and turned negative on Wednesday after data showed that the economy’s service sector expanded at a slower-than-expected rate, raising concerns that weakness in manufacturing is spreading to other sectors.
The Institute for Supply Management (ISM) said its index of non-manufacturing activity fell to 53.5 in January from 55.8 in December. The reading was below expectations of 55.1.
Falling oil prices, tepid U.S. growth and fears regarding a China-led global slowdown have been major factors for a torrid start to the year for stocks. The S&P 500 is already down 6.9 percent this year.
“I think the next couple of quarters could be really volatile,” said Bryce Doty, portfolio manager at Sit Investment Associates.
“You need the markets to settle into a new equilibrium without this manipulated support from the Fed, which means a correction. The problem with corrections is that markets tend to over correct before they rebound.”
Investors have been keeping a keen eye on U.S. economic data for clues regarding the pace of future rate hikes by the Fed. Fed fund futures are pricing in only one hike this year.
Stocks had opened higher as oil prices rose after two straight days of losses and data showed that the private sector added more jobs than expected in the United States.
Oil prices have fallen about 70 percent in the past 18 months, hit by a growing glut and cooling economic growth in China and other emerging markets.
At 10:22 a.m. ET (1522 GMT) the Dow Jones industrial average was down 90.98 points, or 0.56 percent, at 16,062.56, the S&P 500 was down 18.65 points, or 0.98 percent, at 1,884.38 and the Nasdaq Composite index was down 59.14 points, or 1.31 percent, at 4,457.80.
Amazon was down 3.6 percent at $532.08. The stock was the biggest drag on the S&P and the Nasdaq, while Goldman Sachs’ 1.6 percent fall weighed the most on the Dow.
Eight of the 10 major S&P sectors were lower with the financial index’s 2.12 percent loss leading the decliners.
Payrolls processor ADP showed that private employers added 205,000 jobs in January, higher than the 195,000 expected by economists polled by Reuters. The data comes ahead of the more comprehensive employment report by the U.S. government on Friday.
Weak quarterly earnings by U.S. corporations are adding to the worries. Fourth-quarter S&P 500 earnings are expected to have fallen 4.4 percent from a year earlier, according to Thomson Reuters data.
Comcast rose 2 percent to $55.72 after the company posted better-than-expected revenue.
Merck fell 2.7 percent to $49.04 after the drugmaker reported lower-than-expected revenue.
Match Group slumped 15.8 percent to $10.25 after the owner of Tinder mobile app reported revenue that fell short of expectations.
Chipotle Mexican Grill was down 5.9 percent at $447.29.
Declining issues outnumbered advancing ones on the NYSE by 1,918 to 899. On the Nasdaq, 1,809 issues fell and 669 advanced.
The S&P 500 index showed 15 new 52-week highs and 46 new lows, while the Nasdaq recorded 10 new highs and 144 new lows. (Reporting by Tanya Agrawal; Additional reporting by Abhiram Nandakumar; Editing by Don Sebastian)