US close: Stocks slide as worse-than-estimated non-farm payrolls stir interest rate debate
US stocks finished in the red on Friday after the all-important non-farm payrolls report missed forecasts, stirring the debate on the timing of the first interest rates hike in nine years.
The Dow dropped 1.67% while the Nasdaq and S&P 500 fell 1.05% and 1.54% respectively.
American employers added 173,000 jobs in August following a revised 245,000 in July, the Labor Department revealed.
The figure was the smallest gain in five months and fell way short of the 215,000 figure analysts had expected. The unemployment rate fell to 5.1% from 5.3% to reach its lowest level since April 2008, while employment gains for July and June were revised up by a combined 44,000.
“August’s employment report is fairly mixed and can be used to make a case for or against a rate hike at the upcoming FOMC meeting,” said Capital Economics.
“As far as we’re concerned, the September meeting is a 50-50 toss up. Nevertheless, even if the Fed doesn’t hike rates this month, it won’t leave rates at near-zero for much longer given that it either has (or is close to) fulfilling the full employment part of its dual mandate.”
Following the jobs report, Richmond Fed president Jeffrey Lacker described it as “a pretty much right down the middle of the fairway sort of employment report”.
He added that direct implications of the recent market turmoil, caused by China slowdown concerns, for the US economy appear to be quite limited. “I am not arguing that the economy is perfect, but nor is it on the ropes, requiring zero interest rates to get it back into the ring,” Lacker said in the text of a speech delivered on Friday. “It’s time to align our monetary policy with the significant progress we have made.”
The Fed meets on 17-18 September to decide on whether to increase interest.
Elsewhere, stocks fell across the board in Asia, as Hong Kong’s Hang Seng Index and Japan’s Nikkei Stock Average both reversed earlier gains to close down 0.45% and 2.15% respectively, while European stocks declined.
In company news, Netflix slumped as investors remained wary about increasing competition in the TV streaming market. The stock was track to decline for the sixth consecutive session.
Twitter edged lower amid speculation the social media company would name a new permanent CEO. The social media group was expected to make an announcement on Friday but media reports later said the company was waiting until after Monday’s Labor Day holiday.
Meanwhile, Amazon was on the backfoot after saying late on Thursday that it was planning to buy video reformatter Elemental Technologies, as it seeks to add more streaming options to its portfolio.
Smartphone maker Blackberry reversed earlier gains after saying it entered an agreement to acquire security specialist Good Technology for $425m in cash.
S&P 500 - Risers
Peabody Energy Corp. (BTU) $2.28 +5.07%
Motorola Solutions Inc (MSI) $66.31 +1.84%
Noble Energy Inc. (NBL) $30.73 +1.72%
Keurig Green Mountain Inc (GMCR) $58.38 +1.65%
Dollar Tree Inc (DLTR) $68.09 +1.63%
Micron Technology Inc. (MU) $16.82 +1.39%
Mylan Inc. (MYL) $48.05 +1.33%
L Brands Inc (LB) $90.38 +1.23%
Cablevision Systems Corp. (CVC) $27.44 +0.99%
Electronic Arts Inc. (EA) $66.37 +0.88%
S&P 500 - Fallers
Avon Products Inc. (AVP) $4.42 -6.16%
Nabors Industries Ltd. (NBR) $10.11 -5.87%
CONSOL Energy Inc. (CNX) $13.40 -5.77%
United States Steel Corp. (X) $15.06 -5.46%
NRG Energy Inc. (NRG) $17.93 -5.13%
Range Resources Corp. (RRC) $36.50 -4.87%
Denbury Resources Inc. (DNR) $3.56 -4.81%
Helmerich & Payne Inc. (HP) $52.25 -4.48%
Freeport-McMoRan Inc (FCX) $9.71 -4.15%
Hewlett-Packard Co. (HPQ) $26.99 -4.05%
Dow Jones I.A - Risers
Dow Jones I.A - Fallers
E.I. du Pont de Nemours and Co. (DD) $48.60 -3.88%
Goldman Sachs Group Inc. (GS) $180.38 -2.53%
International Business Machines Corp. (IBM) $143.70 -2.10%
General Electric Co. (GE) $24.00 -2.08%
Microsoft Corp. (MSFT) $42.61 -2.05%
Chevron Corp. (CVX) $76.67 -2.03%
Merck & Co. Inc. (MRK) $51.59 -2.01%
Verizon Communications Inc. (VZ) $44.82 -1.97%
Intel Corp. (INTC) $28.52 -1.93%
JP Morgan Chase & Co. (JPM) $61.50 -1.88%
Nasdaq 100 - Risers
Keurig Green Mountain Inc (GMCR) $58.38 +1.65%
Dollar Tree Inc (DLTR) $68.09 +1.63%
Micron Technology Inc. (MU) $16.82 +1.39%
Mylan Inc. (MYL) $48.05 +1.33%
Viacom Inc. Class B (VIAB) $43.34 +0.44%
Priceline Group Inc (PCLN) $1,245.25 +0.39%
Vertex Pharmaceuticals Inc. (VRTX) $126.99 +0.36%
Altera Corp. (ALTR) $49.11 +0.33%
Biogen Inc (BIIB) $302.18 +0.18%
Gilead Sciences Inc. (GILD) $102.06 +0.15%
Nasdaq 100 - Fallers
TripAdvisor Inc. (TRIP) $67.21 -3.25%
Yahoo! Inc. (YHOO) $31.58 -2.95%
Vimpelcom Ltd Ads (VIP) $4.52 -2.80%
Xilinx Inc. (XLNX) $40.07 -2.72%
KLA-Tencor Corp. (KLAC) $47.54 -2.64%
Seagate Technology Plc (STX) $48.21 -2.59%
Expeditors International Of Washington Inc. (EXPD) $47.86 -2.51%
Sandisk Corp. (SNDK) $52.84 -2.37%
Applied Materials Inc. (AMAT) $15.39 -2.35%
Nvidia Corp. (NVDA) $21.75 -2.33%