Wall Street stocks close slightly lower; jobs data strong but rates
still high
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[June 08, 2024] By
Chibuike Oguh
NEW YORK (Reuters) -Wall Street stocks ended slightly lower on Friday in
choppy trading after stronger-than-expected U.S. jobs data pointed to a
robust economy but prompted worries the Federal Reserve may wait longer
to cut interest rates than many investors had hoped.
The U.S. economy generated about 272,000 jobs in May, far more than the
185,000 analysts had forecast, according to a Labor Department report.
The unemployment rate inched up to 4%.
The benchmark S&P 500 slipped immediately after the report while U.S
Treasury yields climbed as traders slashed bets on a September rate
reduction. The index recovered and briefly hit a fresh intraday record
high as investors noted the data pointed to underlying economic health.
It finished slightly lower, with the utilities, materials, and
communication services stocks among the biggest drag. Financials and
technology advanced ahead of others.
For the week, the S&P 500 gained 1.32%, Nasdaq rose 2.38%, and the Dow
added 0.29%.
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"This tells you there's certainly not going to a cut in the short term,
and with the bond yields going back up it's putting a lot of pressure on
the risk-on trade, which is probably small caps," said Sandy Villere,
portfolio manager at Villere & Co in New Orleans.
"It's just a function of interest rates and maybe a little higher for
longer, and people have to recalibrate for that type of environment," he
added.
Traders now see a 56% chance of a September rate reduction, according to
the CME's FedWatch tool. Investors will eye U.S. inflation data next
week and the Federal Reserve's two-day policy meeting, which ends on
June 12.
"No one expects the Fed to cut (rates next week), but will they open the
door for a cut as soon as September is the big question on everyone's
mind," said Ryan Detrick, chief market strategist at the Carson Group,
adding he still sees a September reduction on the table.
The Dow Jones Industrial Average fell 87.18 points, or 0.22%, to
38,798.99, the S&P 500 lost 5.97 points, or 0.11%, to 5,346.99 and the
Nasdaq Composite lost 39.99 points, or 0.23%, to 17,133.13.
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Traders work on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., May 15, 2024. REUTERS/Brendan McDermid
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GameStop slumped 39% in volatile trading just as stock influencer
"Roaring Kitty" kicked off his first livestream in three years. The
gaming retailer had announced a potential stock offering and a drop
in quarterly sales.
Other so-called meme stocks, including AMC Entertainment and Koss
Corp, fell 15.1% and 17.4%, respectively.
Nvidia slipped, on track to extend the previous session's losses,
with its valuation again dipping below the $3 trillion mark.
Lyft shares rose 0.6%, following a forecast of 15% annual growth in
its gross bookings through 2027 after markets closed on Thursday.
Declining issues outnumbered advancers by a 2.72-to-1 ratio on the
NYSE. On the Nasdaq, 1,177 stocks rose and 3,064 fell as declining
issues outnumbered advancers by a 2.6-to-1 ratio.
The S&P 500 posted 17 new 52-week highs and 5 new lows while the
Nasdaq Composite recorded 34 new highs and 149 new lows.
Total volume of shares traded across U.S. exchanges was about 10.75
billion, compared with the 12.7 billion average over
the last 20 trading days.
(Reporting by Chibuike Oguh in New York; additional reporting by
Lisa Mattackal and Johann M Cherian in Bengaluru; Editing by Pooja
Desai and David Gregorio)
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