The New York Dow Jones Stock Exchange closed more than 300 points lower on Thursday (January 5) as investors worried that strong US labor data would pressure the Federal Reserve to raise interest rates for longer than expected
The Dow Jones Industrial Average closed at 32,930.08 points, down 339.69 points, or -1.02%, the S&P 500 closed at 3,808.10 points, down 44.87 points or -1.16%, and the Nasdaq Index closed at 10,305, down 17,14 points, or -1.24 points. %.
The Labor Department reported that initial claims for unemployment benefits fell by 19,000 to a seasonally adjusted 204,000 last week. which was the lowest level since September And below analysts’ expectations of 225,000.
Meanwhile, Automatic Data Processing Inc. said. (ADP) that private sector employment in the United States rose by 235,000 in December. This was above analysts’ expectations of 153,000 jobs from 127,000 in November.
“Obviously, good news about the labor market becomes bad news for the stock market,” said Anthony Saklimbeen, an analyst at Ameriprise. The latest labor data released reflects a strong recovery in the US labor market. and as long as the labor market is strong the Fed will continue to tighten monetary policy to keep inflation down. “
Investors raised expectations that the Fed will raise interest rates by 0.50% in February after the release of strong US labor data, with CME Group’s latest FedWatch Tool indicating that investors are weighing 45.9% on a Fed hike of 0.50% to 4.75-5.00% at the meeting on 31 January-1 February after previously weighing only 27.2%.
Ten of the 11 stocks included in the S&P 500 ended in the negative, with the real estate index losing 2.9 percent and the utilities index losing 2.2 percent, with Jones Lang LaSalle down 1.61 percent and shares of PG&E Corporation. Down 1.35%, shares of Duke Energy fell 1.47 %.
Energy stocks rose 1.99% after WTI oil prices rose overnight. Conoco Phillips was up 3.03%, Exxon Mobil was up 2.24%, Chevron was up 1.8% and Halliburton was up 1.35%.
Tesla shares fell 2.9 percent after sales of electric vehicles made in China fell 44 percent in December to 55,796 units, their lowest level in five months.
Amazon shares fell 2.37% after CEO Andy Jesse confirmed that Amazon will lay off 18,000 more workers than previously planned.
Shares of Bed Bath & Beyond, the leading US home appliance retailer, fell 29.88% after it said it was considering options, including filing for bankruptcy.
Investors are keeping an eye on the release of US nonfarm payrolls figures for December today. Although analysts expected Employment numbers rose by only 200,000 in December. After adding 263,000 jobs in November And the unemployment rate is expected to remain stable at 3.7%.
