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Stocks Tumble on Weak Data, Worries About Fed Stimulus

Dan Berman
Hot Stock Minute

Weak economic data and worries about Fed stimulus led to the worst day on Wall Street in five weeks. The DJIA fell 0.76% to 14,550, the S&P 500 fell 1% to 1,554, and the Nasdaq fell 1.1% to 3,219. Late in the afternoon, the president of the Federal Reserve Bank of San Francisco, John Williams, stated that improvement in the labor market could lead the Fed to begin tapering its quantitative easing program as soon as this summer.

Meanwhile, the ADP private sector payroll report showed 158,000 new non-farm jobs created in March. That was well short of estimates which had been at or just below 200,000. Separately, The Institute for Supply Management said its services index fell to its lowest level since August. The number came in at 54.4, down from 56 in February. Economists had been forecasting 55.8. Any reading above 50 indicates a sector expansion.

Suddenly Zynga (ZNGA) has got game. The stock skyrocketed 15% today as the company launched two online site in the UK that use real money for gambling. The stock first shot up in after-hours trading yesterday when Zynga announced the games were going online. Zynga is said to be working on similar games for Facebook users. Even with the spike, Zynga shares are barely trading at a third of where they were this time last year.

Netflix (NFLX) shares fells 4% on reports that activist investor Carl Icahn had unloaded holdings in the company. But Icahn told our partner CNBC that he hasn't sold a single share. It was previously revealed that Icahn holds a 9.9% stake in the company. Netflix has been one of the best-performing stocks this year.

Tesla (TSLA) hit a speed bump today with shares retreating from all-time highs set earlier in the week, dropping 7% today. Traders appear to be reacting to the company's new leasing program, which was unveiled after-hours yesterday. Company founder Elon Musk had tweeted a major announcement was to come. But observers seemed disappointed by the actual announcement. Under the program, people who pass a credit check will be able to lease an $80,000 sedan for $8,000 down and monthly payments of $1,199. But Tesla says when you consider things like there's no gas, or time spent filling up your tank, the true cost is closer to $500 a month. Website Mashable.com called the $500 figure “dubiously calculated” and Wired.com labeled it "bizarre."

Traders seem to think oil refiner Valero (VLO) has run out of gas. Shares fell more than 4% after tanking 6% yesterday. They first moved lower on the news that Valero was beginning costly upgrades to comply with new emissions regulations. Analysts say refiner stocks are known to be volatile, so shares could bounce back as quickly as they fell. Even with this week's losses, Valero has more than doubled since June when shares were just $20.

Monsanto (MON) is reaping profits from what it has sown. The company released earnings ahead of the opening bell this morning.. It says income climbed 22% in the last quarter. Sales increased 15% to $5.47 billion. Monsanto pointed to strong sales of biotech seeds, particularly in Brazil and other emerging markets. Genetically modified corn seeds are the company's top seller. Analysts had warned than revenues might be down amid reports that Monsanto has been alienating many farmers, but the company actually increased its outlook.