S&P 500, Dow slip after mixed jobs data

By Bansari Mayur Kamdar and Johann M Cherian

July 7, 202310:09 AM EDTUpdated 21 min ago

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 6, 2023. REUTERS/Brendan McDermid

• Summary

• Companies

• Levi Strauss falls after slashing annual profit outlook
• US job growth slows in June; unemployment rate falls to 3.6%
• Indexes mixed: Dow down 0.24%, S&P off 0.06%, Nasdaq adds 0.21%

July 7 (Reuters) – The S&P 500 and the Dow slipped on Friday after latest data signaled resilience in the labor market in the face of the Federal Reserve’s aggressive monetary tightening.

The data showed that while U.S. job growth slowed more than expected in June after surging in the previous month, labor market conditions remained tight, with the unemployment rate retreating from a seven-month high and strong wage gains continuing.

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“Today’s numbers confirm the job market is still strong… and this report gives the green light to the Fed to raise rates,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

“As far as the markets are concerned, the key is the Fed threat, and as you can see, we’re pulling back in futures.”

Traders stuck to bets the Fed will raise its benchmark interest rate this month to a 5.25%-5.5% range, but were skeptical of further hikes beyond that.

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Traders now see about a 34% chance of a further rate hike in November, down from nearly even odds before the report, according to CME’s Fedwatch tool.

Five out of the 11 major S&P 500 sectors declined in early trading on Thursday.

Wall Street’s main indexes ended sharply lower in a broad selloff, with the benchmark S&P 500 posting its biggest daily percentage drop in six weeks.

At 09:36 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 82.28 points, or 0.24%, at 33,839.98, the S&P 500 (.SPX) was down 2.70 points, or 0.06%, at 4,408.89, and the Nasdaq Composite (.IXIC) was up 29.21 points, or 0.21%, at 13,708.26.

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All three major U.S. stock indexes were on track to end the week lower as escalating tensions between Beijing and Washington also weighed on market sentiment.

Among other early movers, the S&P 500 banking index (.SPXBK) gained 1%. All major banks, including JPMorgan Chase (JPM.N), Citigroup (C.N) and Wells Fargo (WFC.N), ticked higher ahead of reporting second-quarter earnings next week.

Tesla (TSLA.O) rose 1.0% after it said it would offer new buyers of its top-selling electric vehicles in China a cash bonus equivalent to almost $500 if they have a referral from an existing owner.

Levi Strauss & Co (LEVI.N) tumbled 7.8% as the denim clothing maker cut its annual profit forecast on Thursday.

U.S.-listed shares of Alibaba gained 5.5% after Chinese authorities said they will impose a $984 million fine on Ant Group, ending the affiliate fintech company’s years-long regulatory overhaul.

Advancing issues outnumbered decliners by a 1.87-to-1 ratio on the NYSE and a 2.32-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and three new lows, while the Nasdaq recorded 13 new highs and 22 new lows.

Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru, additional reporting by Caroline Valetkevitch; Editing by Shinjini Ganguli

Our Standards: The Thomson Reuters Trust Principles.

Bansari Mayur Kamdar

Thomson Reuters

Bansari reports on the global financial markets and writes Reuters’ daily flagship market reports on equities, bonds and currencies. An economist by training and winner of the Arthur MacEwan Award for Excellence in Political Economy, she has written for renowned global papers and magazines including The Diplomat, Boston Globe, Conversation, Huff…