US STOCKS-Wall Street closes modestly lower after jobs report
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NEW YORK, Dec Reuters – The S&P closed slightly lower on Friday, although major indexes rallied off their worst levels of the day, as the November payrolls report fueled expectations the Federal Reserve would maintain its path of interest rate hikes to combat inflation.
The Labor Department s jobs report showed nonfarm payrolls rose, above expectations, and wage growth accelerated even as recession concerns increase.
Wage growth has been in an uptrend since August, said Brian Jacobsen, senior investment strategist at All spring Global Investment in Menomonee Falls, Wisconsin.
We will have to see that trend reverse for the Fed to be comfortable with a pause. Until then, they’ll continue to taper towards a pause.
Investors have been looking for signs of weakness in the labor market, especially wages, as a precursor to faster cooling of inflation that will enable the Fed to slow and eventually stop its current rate hike cycle.
Stocks had rallied earlier in the week after Fed Chair Jerome Powell s comments on scaling back interest rate hikes as early as December.
According to preliminary data, S&P lost. points, or .%, to end at ,. points, while the Nasdaq Composite lost. points, or .%, to ,.. The Dow Jones Industrial Average rose. points, or .%, to ,..
Still, equities ended the session off their lowest levels of the day that saw each of the major indexes tumble at least %.
If anything, I am actually encouraged by how the market is clawing its way back from the level we were at today. It is another indication the market is looking for at least a seasonal December rally, said Sam Stovall, chief investment strategist at CFRA in New York.
The market is beginning to look across the valley and say, OK, a year from now the Fed will likely be on hold and considering cutting rates.
The rate-setting Federal Open Market Committee meets on Dec. -, the final meeting in a volatile year that saw the central bank attempt to stifle the fastest rate of inflation since the s with record interest rates increases.
Growth and technology companies such as Apple, down and Amazon were pressured by concerns over rising rates. The S&P growth index declined while technology shares were the worst-performing among the major S&P sectors.
Ford Motor Co declined on lower vehicle sales in November, while DoorDash was lower after RBC downgraded the food delivery firm s stock. Reporting by Chuck Mikolajczak; Editing by Cynthia Osterman