Stocks: Strong quarter ends with a loss

NEW YORK (CNNMoney.com) -- Stocks ended lower Wednesday, but higher for the quarter after a strong showing in March, as downbeat jobs and manufacturing reports cooled a recent runup.

The Dow Jones industrial average (INDU) lost 50 points, or 0.5%, to end at 10,857.31. The S&P 500 index (SPX) slipped 4 points, or 0.3%. The Nasdaq composite (COMP) lost 7 points, or 0.3%.

Wall Street reached the end of a solid quarter, even with Wednesday's losses. The Dow gained 4.1% over the first three months of the year, after a 5.2% advance in March, while the S&P added 4.9% for the quarter. The tech-heavy Nasdaq had the strongest quarterly showing, up 5.7%.

Wednesday's declines were broad based, with 25 of the blue-chip Dow's 30 components ending lower.

"The market has finished higher on 23 of 25 trading days, so now it's taking a break and adopting a wait-and-see attitude," said Art Hogan, chief market strategist at Jefferies & Co., noting that the market is closed on Good Friday.

Stocks ended slightly higher Tuesday, pushing the Dow to a fresh 18-month high as investors digested mixed reports showing a rise in consumer confidence and continued weakness in the housing market.

Jobs: ADP released its monthly report on employment before the opening bell, showing that private-sector employers cut 23,000 jobs in March. This was in sharp contrast to expectations of a 40,000 job increase, according to economists surveyed by Briefing.com.

In February, the private sector cut a revised 24,000 jobs. ADP has not reported an increase in monthly payroll numbers since January 2008, when 34,000 private-sector jobs were added.

ADP was "a disappointment," said Hogan, especially because expectations are fairly high for Friday's government report on the unemployment rate.

"Census jobs should boost Friday's data, but it's a tree that falls in the forest where no one stands," Hogan said. "I can't remember the last time such an important report came out when the market is closed."

Economy: The Chicago PMI, a regional reading on manufacturing, was released shortly after the market opened and pushed equities further down. The index slipped to 58.8 in March from 62.6 the previous month. Economists predicted a smaller drop, to 61.

Also after the market opened the Census Bureau reported factory orders for manufactured goods rose 0.6% in February, slightly higher than analysts' expectations but significantly less than January's 2.5% increase.

"We've gotten to that point in time when we need Goldilocks-type data, meaning it falls in just the right range," Hogan said. "If reports are too positive, people will be worried the [Federal Reserve] will raise interest rates; too negative, and concerns are raised that the recovery is weak or nonexistent."

Energy stocks and oil prices gained earlier in the session after President Obama announced plans to open large sections of the eastern Gulf of Mexico and an area off the Virginia coast for oil drilling.

Companies: Shares of Research in Motion (RIMM) plunged 5% in after-hours trading after the company reported a profit of $710.1 million, or $1.27 per share. That missed estimates from analysts polled by Thomson Reuters, who estimated earnings of $1.28 per share.

With the first quarter of the year ending with Wednesday's session, Hogan said the market will be looking to see if company earnings estimates are hiked for 2010.

"The new focus is going to be on corporate America's ability to start earning money," Hogan said. "We'll see more mergers and stock buybacks -- and investors will be watching to see how companies deploy their cash."

Outlook: The strong showing in the first quarter of the year means the market will likely see a pullback or about 5-7% in the next quarter, said Peter Cardillo, chief market economist at Avalon Partners.

"We could see a mild correction as early as mid-April, even when companies are in the middle of reporting strong first-quarter earnings," Cardillo said. "That sentiment is already priced into the market."

Throughout the rest of 2010, Cardillo expects continued focus on job market data and corporate earnings. Stocks could end the year 3-5% higher, he said.

World markets: Asian stocks finished lower. In Japan, the Nikkei index lost 0.1%, and the Hang Seng in Hong Kong slipped 0.6%.

In Europe, London's FTSE 100, France's CAC 40 and Germany's DAX ended slightly higher after a choppy session.

The dollar and commodities: The dollar fell against the euro and British pound but rose on the yen.

U.S. light crude oil for May delivery rose $1.39 to settle at $83.76 a barrel, the highest closing price in almost 3 months.

COMEX gold for June delivery added $7.80 an ounce to $1,116.10.

Bonds: Treasury prices were higher, with the 10-year yield falling to 3.83% from 3.87% late Tuesday. Bond prices and yields move in opposite directions.