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U.S. job growth accelerates in Jan, jobless rate ticks
down
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Amazon, Alphabet fall on disappointing results
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Ford drops on downbeat outlook
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Tesla climbs on strong Jan sales in China
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Indexes down: Nasdaq 0.32%, S&P 0.34%, Dow 0.15%
(Updates prices, details)
By Shreyashi Sanyal and Johann M Cherian
Feb 3 (Reuters) - Wall Street's main indexes edged lower
on Friday after data showed the economy added jobs at a rapid
pace last month, feeding into fears that the Federal Reserve
could keep interest rates higher for longer in its fight against
inflation.
The Labor Department's nonfarm payrolls report showed
517,000 job additions in January, almost three times
expectations of 185,000 additions. The unemployment rate ticked
down 3.4% in January to hit a more than 53-1/2-year low.
"Whenever we see these big numbers, the fear of the Fed comes back with a vengeance because people are probably afraid that the Fed is going to push things even further than what they have, running the risk of not soft landing, but more of a car crash," said Brian Jacobsen, senior investment strategist for Allspring Global Investments. Money markets expect the U.S. central bank to hike rates two more times before stopping, after the Fed raised its target rate by 25 basis points on Wednesday.
Rates are seen peaking at 4.95% by June, compared with 4.91% before the data. Worries of higher rates for longer amplified the downbeat mood set by disappointing results from megacap growth companies.
Apple Inc forecast another revenue decline at the start of the year, but its shares reversed course to trade 3% higher.
Amazon.com Inc fell 4.5% as it warned that its
operating profit could fall to zero in the current quarter, and
Google parent Alphabet Inc missed Wall Street
estimates for fourth-quarter results, sending its shares down
1.5%.
The results looked set to snap the previous session's rally
on Fed Chair Jerome Powell's repeated references to the
"disinflationary" process being underway in his remarks after
Wednesday's meeting.
The three main Wall Street indexes were still set for gains
this week. The Nasdaq eyed its fifth consecutive weekly
advance, its best streak since October.
At 10:18 a.m. ET, the Dow Jones Industrial Average was down 52.53 points, or 0.15%, at 34,001.41, the S&P 500 was down 14.19 points, or 0.34%, at 4,165.57, and the
Nasdaq Composite was down 38.81 points, or 0.32%, at
12,162.01.
Ten of the top 11 S&P 500 sectors fell with only energy
stocks in positive territory as oil prices rose.
Ford Motor Co dropped 8.1% after missing quarterly earnings expectations while also warning of a rocky year ahead. In a bright spot, Tesla Inc jumped 5.6%, boosted by strong January electric vehicle sales in China. Nearly 70% of half the S&P 500 firms that reported fourth-quarter earnings have topped Wall Street expectations. Analysts now see earnings of S&P 500 firms declining 2.7% for the quarter, according to Refinitiv. Declining issues outnumbered advancers for a 2.41-to-1 ratio on the NYSE and for a 1.44-to-1 ratio on the Nasdaq. The S&P index recorded eight new 52-week highs and no new low, while the Nasdaq recorded 54 new highs and five new lows. (Reporting by Shubham Batra, Shreyashi Sanyal and Johann M Cherian; Editing by Sriraj Kalluvila)
