US stocks drop on jobs data, Yellen warning on stocks

Wall Street stocks fell for a second straight session Wednesday following disappointing jobs data and a warning from Federal Reserve Chair Janet Yellen on high equity valuations.

At the closing bell, the Dow Jones Industrial Average was at 17,844.45, down 83.75 points (0.47 percent).

The broad-based S&P 500 fell 9.09 (0.44 percent) to 2,080.37, while the tech-rich Nasdaq Composite Index lost 19.68 (0.40 percent) at 4,919.64.

Payrolls firm ADP estimated the US added just 169,000 private-sector jobs in April, the second month in a row under 200,000, as the petroleum sector downturn continued to pinch the labor market.

Fed Chair Yellen, addressing a conference on lessons from the 2008 financial crisis, characterized US stock market valuations as "quite high" and said they pose "potential dangers" to financial stability.

Chris Low, chief economist at FTN Financial, said Yellen's remarks suggested she is "pretty eager" to raise interest rates despite some disappointing economic data.

"She seems to be hinting that they're going to have to raise rates one way or the other as long as the economy is growing at all," Low said.