Wall St pares declines after stunning jobs report

  • Reuters
  • Stock Market News
Wall St pares declines after stunning jobs report
Credit: © Reuters.

By Shreyashi Sanyal and Johann M Cherian

(Reuters) - U.S. stock indexes pared declines by afternoon on Friday as a strong jobs report that initially raised fears of the Federal Reserve keeping interest rates higher for longer also pointed to the resilience in the economy in the face of aggressive policy tightening.

The Labor Department's nonfarm payrolls report showed 517,000 job additions in January, almost three times above expectations, while the unemployment rate hit 3.4%, its lowest since 1969.

Separately, data showed that the U.S. services industry's activity rebounded strongly in January.

"The data suggests an economy that is running cooler than half a year ago, but not falling off the cliff," Bill Adams, chief economist for Comerica (NYSE: CMA ) Bank said.

"The outlook is cloudy, but the backward-looking data shows 2023 began on a stronger footing than seemed the case a few weeks ago."

Money markets expect the U.S. central bank to hike rates two more times before stopping, after the Fed raised its target rate by 25 basis points on Wednesday. Rates are seen peaking at 4.95% by June, compared with 4.91% earlier.

Investors also parsed disappointing earnings, with Amazon.com Inc (NASDAQ: AMZN ) sliding 5.8% as it warned that its operating profit could fall to zero in the current quarter.

Google parent Alphabet (NASDAQ: GOOGL ) Inc dropped 2.0% as it missed Wall Street estimates for fourth-quarter results.

Markets rallied in the previous session on Fed Chair Jerome Powell's repeated references to the "disinflationary" process being underway in his remarks after Wednesday's meeting.

Apple Inc (NASDAQ: AAPL ) forecast another revenue decline at the start of the year, but the iPhone maker reversed course to trade 2.7% higher.

Tesla (NASDAQ: TSLA ) Inc jumped 3.0% after the U.S. Treasury Department said that some of its Model Y variants would be eligible for tax credits.

Wall Street's main indexes have had a solid start to the year as megacap growth stocks, which took a beating last year, rose on hopes that the Fed's hiking spree will come to an end this year.

The Nasdaq eyed its fifth consecutive weekly advance, its best streak since October 2021.

"If the Fed is indeed less hawkish and the economy is doing well, you would want to own the big names, why sit on the sidelines?," said Michael Matousek, executive board member

Clementson Ranch.

At 1:01 p.m. ET, the Dow was down 58.67 points, or 0.17%, at 33,995.27 and the S&P 500 was down 26.21 points, or 0.63%, at 4,153.55.

The Nasdaq Composite was down 99.50 points, or 0.82%, at 12,101.32.

Ford Motor (NYSE: F ) Co slid 6.6% after missing quarterly earnings expectations while also warning of a rocky year ahead.

Analysts now see fourth-quarter earnings of S&P 500 firms declining 2.7%, according to Refinitiv.

Declining issues outnumbered advancers for a 2.03-to-1 ratio on the NYSE and for a 1.25-to-1 ratio on the Nasdaq.

© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 27, 2023. REUTERS/Andrew Kelly/File Photo

The S&P index recorded 15 new 52-week highs and no new low, while the Nasdaq recorded 103 new highs and eight new lows.

(This story has been corrected to say Michael Matousek is an executive board member of Clementson Ranch, not a head trader at U.S. Global Investors Inc, in paragraph 14)

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

  • Promise Khoza @Promise Khoza
    so this means that market will drop?
    Like 1
    • Mandisi Stuurman @Mandisi Stuurman
      of course
      Like 0
    • Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

      Error: File type not supported

      Drop an image here or