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* ADP employment report comes in below expectations
* U.S. defense secretary says North Korea a danger
* Indexes down: Dow 0.8 pct, S&P 1.1 pct, Nasdaq 1.1 pct
By Caroline Valetkevitch
NEW YORK, April 3 (Reuters) - U.S. stocks fell on Wednesday,with the S&P 500 index posting its biggest daily decline in morethan a month, after a weaker-than-expected survey of privateemployers raised concerns about the strength of the economy.
News the Pentagon was sending a missile defense system toGuam in the coming weeks and remarks by Defense Secretary ChuckHagel that North Korea posed a "real and clear" danger added toinvestor caution.
The ADP National Employment report on private-sector jobsshowed less-than-expected hiring in March, which was a worryingsign for investors before the Labor Department's March non-farmpayrolls report on Friday.
Wednesday's market decline came a day after the benchmarkS&P 500 and the Dow finished at record highs. Energy andfinancial sectors led the day's fall on the S&P 500, with theS&P 500 financial index down 1.7 percent.
"People continue to push the thesis that the bull marketwill remain intact as long as housing continues to be strong,and there will be a little doubt put on that thesis if the jobsnumber Friday is underwhelming," said Michael James, managingdirector of equity trading at Wedbush Securities in Los Angeles.
Worries about North Korea added "another risk element tothe market," he said.
Defense company shares gained despite the broader movelower. Shares of Northrop Grumman were up 1.1 percent at$70.18, while shares of General Dynamics were up 2.1percent at $68.39.
The Dow Jones industrial average was down 111.66points, or 0.76 percent, at 14,550.35. The Standard & Poor's 500Index fell 16.56 points, or 1.05 percent, at 1,553.69,its biggest daily percentage decline since Feb. 25. The NasdaqComposite Index was down 36.26 points, or 1.11 percent,at 3,218.60.
The S&P 500, up 8.9 percent since the start of the year, hascome close to its intraday record level of 1,576.09 in the pastfew sessions before pulling back, causing analysts to questionif the recent rally is sustainable.
The Dow Jones Transportation Average, seen as abarometer of economic activity, fell 1.3 percent to 6005.95,closing below its 50-day moving average for the first time sinceNov. 21.
On Tuesday, decliners beat advancers in the market despitegains in the three major indexes. Also, healthcare, consumerstaples and utilities, seen as the S&P's most defensive sectors,have led this year's rise on the index.
Energy shares were among Wednesday's biggest decliners, withU.S. crude oil prices falling 2.8 percent. Shares of Chevron were down 1 percent at $117.78.
Other declining stocks included ConAgra Foods Inc,which fell 1.9 percent to $34.85 after reporting third-quarterearnings that fell 57 percent, though revenue grew.
Monsanto Co rose 0.9 percent to $104.51 afterraising its full-year profit forecast.
First-quarter earnings forecasts have been lowered sincethe start of the year, with S&P 500 company earnings nowexpected to have risen 1.6 percent in the quarter compared witha year ago, according to Thomson Reuters data. A Jan. 1 forecastput earnings growth at 4.3 percent.
Shares of Zynga Inc surged 15 percent to $3.53after the company said it would begin offering poker andcasino-style games in Britain in partnership with Bwin.partyDigital Entertainment.
The ADP report showed U.S. companies hired at the slowestpace in five months, far below what economists had expected,though the February report was revised upward.
The more widely watched U.S. government jobs report, dueFriday, is expected to show 200,000 jobs were created lastmonth.
In another report, the Institute for Supply Management'sMarch services sector index also came in below expectations,with the pace of growth at the lowest level in seven months.
Volume was roughly 7.1 billion shares traded on the New YorkStock Exchange, the Nasdaq and the NYSE MKT, compared with the2012 average daily closing volume of about 6.45 billion.
Decliners outpaced advancers on the NYSE by about 4 to 1 andon the Nasdaq by nearly 3 to 1.
