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* Sept. U.S. private payrolls grow slower than expected
* Ford falls as quarterly auto sales drop
* Activision Blizzard down on Bernstein rating cut
* Lennar up on better-than-expected profit
* Indexes down: Dow 1.74%, S&P 1.65%, Nasdaq 1.58% (Adds comment, details; update prices)
By Medha Singh and Arjun Panchadar
Oct 2 (Reuters) - U.S. stocks fell to more than a one-month low and were set to post their sharpest drop in nearly six weeks on Wednesday, as monthly private sector hiring slowed, amplifying fears that the trade war with China was hurting the United States.
The technology stocks which have powered the market’s climb for most of the year, shed 2.10%. The industrial and materials sectors also fell more than 2% each, posting the biggest declines among the 11 major S&P sectors.
The Dow Jones Transport Average, often looked at as a gauge of the economy’s health, tumbled 2.24%.
Trade tensions likely spilled over to the domestic labor market as U.S. private employers hired fewer-than-expected workers in September, according to the ADP National Employment Report.
“People have been anticipating a bear market for years and they are very anxious and so any number like the ADP number is amplified in the volatility on the downside,” said Tom Plumb, chief investment officer at Plumb Funds in Madison, Wisconsin.
The private payrolls report, a precursor to the Labor Department’s more comprehensive jobs report due on Friday, comes a day after data showed U.S. factory activity contracted to its lowest level in more than a decade.
That hit investor faith in the strength of the domestic economy, a key reason for a rally in the benchmark index this year, wiping off the third-quarter gains on the S&P 500 and Dow.
Both indexes slipped below their 100-day moving averages for the first time in about a month on Wednesday, seen as a strong technical support level that could presage further losses.
The benchmark index is now about 4.5% below its all-time high hit in July, after coming within striking distance of it two weeks ago.
World equity benchmarks also hit their lowest levels in a month on renewed fears that the trade war could push the global economy into a recession.
At 11:17 a.m. ET, the Dow Jones Industrial Average was down 463.10 points, or 1.74%, at 26,109.94, the S&P 500 was down 48.60 points, or 1.65%, at 2,891.65. The Nasdaq Composite was down 125.04 points, or 1.58%, at 7,783.65.
The Cboe Volatility Index, or VIX, an options-based gauge of investor anxiety, rose 2.06 points to 20.62, its highest in about a month.
Activision Blizzard Inc dropped 3.1% after Bernstein downgraded the videogame maker’s shares to “market perform”.
Ford Motor Co shares fell 3.9% after the carmaker reported an about 5% fall in U.S. auto sales for the third quarter. Shares of General Motors Co dipped 3.5% ahead of its quarterly auto sales report.
In a bright spot, homebuilder Lennar Corp gained 2.0% after the company reported a better-than-expected profit as cheaper mortgage rates led to higher demand for its homes.
Johnson & Johnson jumped 1.7% after the drugmaker said it will pay $20.4 million to settle claims by two Ohio counties, allowing it to avoid an upcoming federal trial seeking to hold the industry responsible for the nation’s opioid epidemic.
Declining issues outnumbered advancers for a 4.27-to-1 ratio on the NYSE and a 2.79-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 11 new lows, while the Nasdaq recorded four new highs and 151 new lows. (Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Arun Koyyur)