U.S. Stocks Moving Mostly Lower In Reaction To Monthly Jobs Data

After initially showing a lack of direction, stocks have moved mostly lower over the course of morning trading on Friday. The major averages have all moved to the downside, extending the pullback seen over the past few sessions.

Currently, the major averages are all in the red, although the tech-heavy Nasdaq is underperforming its counterparts. While the Nasdaq is down 128.75 points or 0.9 percent at 14,952.12, the Dow is down 72.40 points or 0.2 percent at 36,164.07 and the S&P 500 is down 20.44 points or 0.4 percent at 4,675.61.

The weakness that has emerged on Wall Street comes following the release of the Labor Department’s closely watched monthly jobs report.

While the report showed much weaker than expected job growth in the month of December, the unemployment rate still fell by more than expected.

The report said non-farm payroll employment rose by 199,000 jobs in December after climbing by an upwardly revised 249,000 jobs in November.

Economists had expected employment to jump by 400,000 jobs compared to the addition of 210,000 jobs originally reported for the previous month.

Despite the weaker than expected job growth, the unemployment rate slid to 3.9 percent in December from 4.2 percent in November. The unemployment rate was expected to edge down to 4.1 percent.

With the bigger than expected decrease, the unemployment rate fell to its lowest level since hitting 3.5 percent in February of 2020.

Economists have suggested the drop in the unemployment rate will be enough to keep the Federal Reserve on track to raise interest rates in the coming months.

Traders subsequently seem concerned the Fed will be raising rates at a time of slowing economic growth as a result of the Omicron variant of the coronavirus.

The minutes of the latest Fed meeting suggested the central bank could begin raising interest rates and shrinking its balance in the near future in an effort to combat elevated inflation.

Semiconductor stocks have shown a significant move to the downside on the day, resulting in a 2.6 percent slump by the Philadelphia Semiconductor Index.

Considerable weakness has also emerged among housing stocks, as reflected by the 1.8 percent drop by the Philadelphia Housing Sector Index.

Networking and software stocks have also moved notably lower, while airline stocks are showing a strong move to the upside.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. China’s Shanghai Composite Index slipped by 0.2 percent, while Hong Kong’s Hang Seng Index jumped by 1.8 percent.

The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index has risen by 0.3 percent, the German DAX Index and the French CAC 40 Index are both down by 0.8 percent.

In the bond market, treasuries are seeing continued weakness in reaction to the monthly jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.7 basis points at 1.780 percent.

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