Wall St drops more than 1% with jobs data feeding fears of more Fed
tightening
Send a link to a friend
[January 06, 2023] By
Sinéad Carew and Amruta Khandekar
(Reuters) - Wall Street's main indexes lost more than 1% on Thursday,
with Nasdaq leading the declines, as evidence of a tight labor market
eroded hopes that the Federal Reserve could pause its rating hiking
cycle anytime soon as it keeps focused on inflation.
Thursday's ADP National Employment report showed a higher-than-expected
rise in private employment in December. Another report showed weekly
jobless claims fell last week.
On Wednesday, another data set showed a moderate fall in U.S. job
openings. While a strong labor market would usually be welcomed as a
sign of economic strength, investors currently see it as a reason for
the Fed to keep interest rates high.
"It's very clear that good news on the labor market means bad news for
the stock market. Data is showing that the labor market is very
resilient," said Anthony Saglimbene, chief market strategist at
Ameriprise in Tory Michigan.
"As long as the labor market is resilient, the Federal Reserve has to
continue to tighten financial conditions to bring inflation down," said
that strategist who expects investors to be keenly focused on wage
inflation in Friday's jobs report.
![](http://archives.lincolndailynews.com/2023/Jan/06/images/ads/current/LPL_small%201.gif)
The Dow Jones Industrial Average fell 339.69 points, or 1.02%, to
32,930.08, the S&P 500 lost 44.87 points, or 1.16%, to 3,808.1 and the
Nasdaq Composite dropped 153.52 points, or 1.47%, to 10,305.24.
The indexes lost steam late in the day, ending close to their session
lows. They had pared losses in the early afternoon when St. Louis
Federal Reserve leader James Bullard said 2023 could finally bring some
welcome relief on the inflation front.
While Saglimbene noted that Bullard's comments were not surprising, his
suggestion that rate hikes were starting to show some signs of dampening
inflation, provided some reassurance.
Among the S&P's 11 major sectors, real estate - which was the biggest
percentage gainer on Wednesday - lead Thursday's sector losses with a
2.9% drop, with utilities came next, falling 2.2%.
The sole gainer was energy, which closed up 1.99% after crude oil
futures settled higher.
[to top of second column] |
![](../images/010623PIX/busine89.jpg)
A trader works on the trading floor at
the New York Stock Exchange (NYSE) in New York City, U.S., December
14, 2022. REUTERS/Andrew Kelly
![](http://archives.lincolndailynews.com/2023/Jan/06/images/ads/current/lincolnheating_quarter_LUAL_2022.png)
On Wednesday, Wall Street's main indexes had erased some of their
gains after minutes from the Fed's December meeting showed officials
were laser-focused on fighting inflation even as they agreed to slow
the hiking pace to limit economic risks.
Earlier Thursday both Kansas City Fed leader Esther George and
Atlanta President Raphael Bostic stressed that the central bank's
priority was to curb inflation through policy tightening.
Traders see rates peaking at slightly above 5% in June.
The more comprehensive non farm payrolls report due on Friday, will
be looked to for further clues on labor demand and the rate hike
trajectory.
Among individual stocks, Tesla Inc ended down 2.9% after December
sales of its China-made electric vehicles fell to a five-month low,
while Amazon.com Inc finished down 2.4% after it announced increased
layoff plans.
Walgreens Boots Alliance Inc finished down 6% at $35.19 after the
drugstore chain posted a quarterly loss on an opioid litigation
charge.
Shares in Bed Bath & Beyond Inc plunged 29.9% to $1.69 after the
home goods retailer said it was exploring options, including
bankruptcy.
Declining issues outnumbered advancing ones on the NYSE by a
1.58-to-1 ratio; on Nasdaq, a 1.44-to-1 ratio favored decliners.
The S&P 500 posted 8 new 52-week highs and 7 new lows; the Nasdaq
Composite recorded 68 new highs and 66 new lows.
![](http://archives.lincolndailynews.com/2016/Aug/26/images/ads/current/ldn_sda_062409.png)
On U.S. exchanges was 10.21 billion shares changed hands compared
with the 10.79 billion moving average for the last 20 trading days.
(Reporting by Sinéad Carew in New York, Shubham Batra, Bansari Mayur
Kamdar and Ankika Biswas in Bengaluru; Editing by Arun Koyyur,
Shounak Dasgupta and David Gregorio)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |