Stocks fell Friday morning as traders evaluated the jobs report for September, which showed the unemployment rate continued to decline and led to an increase in interest rates.
The Dow Jones Industrial Average fell 536 points, or 1.8 percent. The S&P 500 lost 2.4%, while the Nasdaq Composite was down 3.3%.
Friday’s job numbers showed The US economy added 263,000 jobs in Septemberslightly below the Dow Jones estimate of 275,000. However, the unemployment rate came in at 3.5%, down from 3.7% the previous month in a sign that the jobs picture continues to strengthen even as the Federal Reserve tries to slow the economy by raising interest rates to stem inflation.
“While the data was as expected, it appears that the drop in unemployment is what the markets are interested in because of what that means for the Federal Reserve,” said Peter Bokfar, chief investment officer at Bleakley Financial. “When combined with the low level of initial jobless claims, the pace of the chapter remains subdued and that of course makes the Fed excited about continuing with its aggressive rate hikes.”
The drop in the unemployment rate led to a jump in rates, which in turn affected futures contracts. The two-year Treasury yield jumped 8 basis points to 4.31%. (1 basis point equals 0.01%).
Advanced Micro Devices stock fell after the chip maker Warned of third-quarter revenue It will be less than expected. Levi Strauss shares fell after a cut to its guidance.
The major averages closed lower during Thursday’s trading but are on their way to end the first week of the month higher. The Dow and Standard & Poor’s are set to end the week up about 2%, while the Nasdaq is on course to rise 1.5%.
said Christopher Harvey, equity analyst at Wells Fargo Collateral. “What appears to be their increasingly unique focus – price stability – is likely to help spur turbulence.”
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