Stocks continue to see considerable weakness in mid-day trading on Friday after an early move to the downside. The major averages have slid firmly into negative territory following the mixed performance seen in the previous session.
In recent trading, the Dow and the S&P 500 have fallen to new lows for the session. The Dow is down 399.21 points or 1.5 percent at 25,787.50, the Nasdaq is down 83.22 points or 1.1 percent at 7,302.65 and the S&P 500 is down 34.07 points or 1.2 percent at 2,787.91.
Concerns about higher interest rates are weighing on Wall Street after the Labor Department released a report showing stronger than expected job growth and a jump in wages.
The report said non-farm payroll employment surged up by 200,000 jobs in January after climbing by an upwardly revised 160,000 jobs in December.
Economists had expected employment to increase by about 180,000 jobs compared to the addition of 148,000 jobs originally reported for the previous month.
The Labor Department said the unemployment rate came in at 4.1 percent in January, unchanged from the three previous months and in line with economist estimates.
Meanwhile, the annual rate of growth in average hourly employee earnings accelerated to 2.9 percent in January from an upwardly revised 2.7 percent in December.
"Given companies such as WalMart have credited Trump's tax cuts as a way for them to afford higher worker pay we suspect we will see the wage numbers pick-up further," said James Knightley, Chief International Economist at ING.
He added, "Consequently, it will need a big shock to prevent the Fed from hiking in March, but it could happen in the form of a damaging government shutdown should politicians fail to resolve their differences."
A negative reaction to quarterly results from big name tech companies like Google parent Alphabet (GOOGL) and Apple (AAPL) have also contributed to the sell-off.
Sector News
Energy stocks continue to turn in some of the market's worst performances on the day amid a steep drop by the price of crude oil. With crude for March delivery tumbling $1.01 to $64.79 a barrel, the S&P Energy Index is down by 3.7 percent.
Industry giant Exxon Mobil (XOM) is posting a steep loss after reporting fourth quarter earnings that came in below analyst estimates.
Significant weakness also remains visible among housing stocks, as reflected by the 2.2 percent loss being posted by the Philadelphia Housing Sector Index. The index has fallen to its lowest intraday level in well over a month.
Steel, computer hardware, chemical, and telecom stocks have also moved notably lower on the day, reflecting broad based weakness on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Friday. Japan's Nikkei 225 index slumped by 0.9 percent, while China's Shanghai Composite Index rose by 0.5 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index dropped by 0.6 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.6 percent and 1.7 percent, respectively.
In the bond market, treasuries have moved sharply lower following the upbeat jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.8 basis points at 2.851 percent.
by RTT Staff Writer
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