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Wave of weak U.S. data fuels slowdown fears
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U.S. jobs data due Friday, when many markets on holiday
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Gold, crude prices on track for weekly gain
(Updates to U.S. market open; changes dateline to NEW YORK,
previous LONDON/TOKYO)
By Stephen Culp
NEW YORK, April 6 (Reuters) - U.S. stocks headed lower
and Treasury yields halted their plunge on Thursday, as
investors digested weak labor market data and looked to Friday's
jobs report for signs the Federal Reserve's restrictive policy
could be edging the economy closer to recession.
All three major U.S. stock indexes were red, with the S&P
500 and the Nasdaq on course to snap three-week winning streaks
at the conclusion of the holiday-shortened week.
Economic data released on Thursday suggested the U.S. labor
market is feeling the effects of the Federal Reserve's string of
hawkish interest rate hikes in its attempt to cool down the
economy and, in so doing, rein in inflation.
On Friday, a market holiday, the Labor Department is due to
release its March employment report, and market participants
will have the weekend to digest the data before Monday's opening
bell.
"We have had a few days in a row of weak economic data,"
said Tom Hanlin, national investment strategist at US Bank
Wealth Management in Minneapolis. "The question is are we seeing
a slowing economy, will the Fed continue to raise interest
rates, and will this result in a recession this year?"
At last glance, financial markets have priced in a 52%
likelihood that the central bank will leave the Fed funds target
rate at the 4.75% to 5.00% range at the conclusion of their next
monetary policy meeting in May, according to CME's FedWatch
tool.
"It’s kind of a 50/50 from investors whether there will be a
rate hike at the next Fed meeting," Hanlin added. "Investors are
pricing in rate cuts before year-end, but the Fed has said they
will keep rates at a high level for as long as it takes.
"That gap is what’s causing volatility in the markets." The Dow Jones Industrial Average fell 124.95 points, or 0.37%, to 33,357.77, the S&P 500 lost 13.4 points, or 0.33%, to 4,076.98 and the Nasdaq Composite dropped 39.68 points, or 0.33%, to 11,957.18. European stocks moved in the opposite direction as gains in real estate and travel helped offset concerns over a U.S. economic slowdown. The pan-European STOXX 600 index rose 0.49% and MSCI's gauge of stocks across the globe shed 0.27%. Emerging market stocks lost 0.37%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.46% lower, while Japan's Nikkei lost 1.22%. Treasury yields steadied after recent sharp declines following the jobless claims report. Benchmark 10-year notes last rose 3/32 in price to yield 3.2773%, down from 3.287% late on Wednesday. The 30-year bond last rose 10/32 in price to yield 3.5413%, down from 3.557% late on Wednesday. The greenback seesawed against a basket of world currencies in advance of Friday's nonfarm payrolls report, which falls on a market holiday. The dollar index rose 0.1%, with the euro up 0.12% to $1.0916. The Japanese yen weakened 0.35% versus the greenback at 131.79 per dollar, while Sterling was last trading at $1.2431, down 0.21% on the day.
Crude prices edged lower, but remained on course for a weekly gain in the wake of OPEC+ production cuts and a drop in U.S. oil inventories. U.S. crude fell 0.14% to $80.50 per barrel and Brent was last at $84.86, down 0.15% on the day. Gold headed lower, but the safe-haven metal was on track for a weekly gain amid growing recession jitters. Spot gold dropped 0.5% to $2,009.98 an ounce. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD Global asset performance Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Stephen Culp; Additional reporting by Kevin Buckland in Tokyo and Naomi Rovnick in London; editing by Jonathan Oatis)
