US indices fell on Friday as investors worried about soaring US Treasury yields and the prospect of more US Federal Reserve rate hikes.
“The solid jobs number today confirms the economy is on solid footing. Earnings have been strong, the employment backdrop is strong. There will likely not be a recession this year, which is a good thing, but the uncertainty over a 40-year-high inflation and … a hawkish Fed are still what investors are faced with the remainder this year” LPL Financial chief market strategist Ryan Detrick said.
Nonfarm payrolls last month increased by 428,000 jobs, versus expectations of 391,000 job additions, underscoring the economy’s strong fundamentals despite a contraction in gross domestic product in the first quarter, a US Department of Labor report showed.
The unemployment rate remained unchanged at 3.6 percent last month, while average hourly earnings increased 0.3 percent against an expected 0.4 percent rise.
Ten of the 11 major S&P sectors declined, with energy outperforming with a 1.5 percent gain as oil prices climbed on supply concerns.
“Oil is up again, continuing the inflationary worries that we are seeing and energy is bucking the trend of a very weak market, but the higher natural gas and crude oil prices have been tailwinds for the energy sector this year,” Detrick said
Megacap growth stocks slipped, with a few exceptions including Apple Inc, which rose 0.7 percent. JP Morgan Chase slid 1 percent to lead losses among big banks.
The yield on the benchmark 10-year Treasury notes rose to 3.131 percent earlier in the session.
Most traders are expecting a 75 basis-point hike at the US central bank’s meeting next month, despite Fed Chairman Jerome Powell ruling that out.
The CBOE volatility index, a measure of investors’ anxiety, spiked to 31.41 points, while the NASDAQ and S&P 500 posted their fifth straight week of declines, and the Dow its sixth. It was the longest losing streak for the S&P 500 since mid-2011 and since late 2012 for the NASDAQ.
The Dow Jones Industrial Average on Friday fell 0.3 percent, to 32,899.37, down 0.24 percent from a week earlier, while the S&P 500 lost 0.57 percent, to 4,123.34, posting a weekly decline of 0.21 percent. The tech-heavy NASDAQ slipped 1.4 percent to 12,144.66 in choppy trading, down 1.54 percent on the week.
Declining issues outnumbered advancing ones on the NYSE by a 2.71-to-1 ratio; on the NASDAQ, a 3.12-to-1 ratio favored decliners.
The S&P 500 posted one new 52-week high and 61 new lows, while the NASDAQ Composite recorded 13 new highs and 717 new lows.
