And the Institute for Supply Management said that its nonmanufacturing index slid to 47.9 in March from 53.9 in February, indicating a contraction in service industries after 13 months of growth.
Shares declined on Thursday, breaking a three-day winning streak for the Standard & Poor's 500-stock index after an unexpected contraction in service industries raised concern about the economic recovery a day before the government's November jobs report.
The report warns that "to achieve aggregate savings of circa £40m over the three years will require significant contraction in service delivery and reduction in staffing".
Howard Archer at IHS Global Insight says the contraction in eurozone services in March indicates that the area suffered a sixth successive quarter of GDP contraction in the first quarter of 2013.
Meanwhile, the Institute for Supply Management's nonmanufacturing index was something of a bright spot Tuesday, showing that contraction in the services sector slowed in December, but the National Association of Retailers said pending home sales fell again in November, and the Commerce Department recorded a 4.6% drop in factory orders in November, the fourth straight monthly decline.
The morning advance stalled despite a report from the Institute for Supply Management that showed less contraction in the services sector in December than the month before, an encouraging sign in light of slowing factory activity that was apparent in the government's November report on factory orders and inventories, which declined more than expected, albeit at a slower pace.
Investors took some heart from a report from the Institute for Supply Management, which showed that contraction in the service sector slowed slightly in January.
A series of disappointing US figures did much of the damage, with more than half a million private sector jobs lost in May, a fall in mortgage applications last week and a sharper than expected contraction in the US service sector.
Gains in manufacturing, management and administrative jobs in July were offset by a contraction in scientific and technical services, government and construction.
