NEW YORK: The stock market experienced a tumultuous session on Friday, with Wall Street’s main indexes ending lower. This came as investors analyzed a US jobs report that revealed weaker-than-expected growth. Additionally, the market eagerly awaited more economic data and corporate earnings in the upcoming weeks.
According to US government data, the country added the fewest jobs in 2-1/2 years during June. However, persistently strong wage growth indicated that labor market conditions remained tight. Despite the initially positive performance of the benchmark S&P 500, stocks sold off towards the end of the session.
Quincy Krosby, chief global strategist at LPL Financial, noted that investors are taking a more cautious approach as they enter a crucial week that marks the beginning of earnings season and includes a significant mid-week inflation reading.
The report on nonfarm payrolls for June showed an increase of 209,000 jobs. This followed a sell-off on Thursday triggered by a surge in June private payrolls, heightening concerns that the Federal Reserve would take aggressive action to raise interest rates in order to tame inflation. Josh Jamner, an investment strategy analyst at ClearBridge Investments, commented on the jobs report, stating that it aligns with what the Fed would like to see. However, he also emphasized that continued stabilization in the job market would ultimately make the Fed’s objectives easier to achieve.
On Friday, the Dow Jones Industrial Average dropped 187.38 points or 0.55% to close at 33,734.88. Similarly, the S&P 500 lost 12.64 points or 0.29% to reach 4,398.95, and the Nasdaq Composite declined by 18.33 points or 0.13% to settle at 13,660.72.
Among the S&P 500 sectors, defensive groups witnessed the largest decrease, with consumer staples experiencing a decline of 1.3%. Conversely, energy stocks gained 2.1%, while materials rose by 0.9%. The small-cap Russell 2000, on the other hand, ended the day with a 1.2% increase.
Despite the strong performance during the first half of the year, major indexes concluded the week with losses. The S&P 500 fell approximately 1.2%, the Dow slid around 2%, and the Nasdaq dropped 0.9%.
Although the Fed previously paused its actions in June, the market widely predicts that rates will be raised at its upcoming meeting later this month. This is due to job growth continuing to surpass pre-pandemic levels.
Austan Goolsbee, the Chicago Fed president, expressed agreement with his fellow central bankers at the US Federal Reserve, stating that rates will need to rise a few more times this year in order to combat inflation.
In company news, shares of Levi Strauss & Co saw a decline of 7.7% after the denim clothing manufacturer reduced its annual profit forecast. However, Rivian Automotive experienced a surge of 14.2% after surpassing expectations in its quarterly deliveries report. Additionally, US-listed shares of Alibaba increased by 8% after Chinese authorities announced a fine of US$984 million on Ant Group, effectively concluding the fintech company’s long-awaited regulatory overhaul.
Advancing issues outnumbered decliners on the NYSE, with a ratio of 2.49-to-1. Similarly, on the Nasdaq, the ratio favored advancers at 2.00-to-1. The S&P 500 recorded 11 new 52-week highs and five new lows, while the Nasdaq Composite achieved 45 new highs and 63 new lows. Overall, approximately 10.3 billion shares were traded on US exchanges, slightly below the 11.1 billion 20-day average.
Credit: The Star : Business Feed
