An operator of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/SPENCER PLATT)
The New York Stock Exchange ended split on Friday after the strong and surprising US jobs number, after indexes initially reacted negatively to the news because it could portend future rate hikes.
The Dow Jones index closed in the green at 32,803.47 points (+0.23%), the Nasdaq fell 0.50% to 12,657.55 points after falling 1.30% during the session. The S&P 500 fell 0.16% to 4,145.19 points.
It appears the market has “rationalized its initial impulsive reaction,” which was to collapse just before open on the announcement of 528,000 jobs created versus 250,000 expected in July, explained Briefing.com’s Patrick O’Hare to AFP.
Investors “finally thought these numbers showed the economy could withstand the central bank’s (Fed) monetary tightening.”
“The other idea is also that the jobs report is a lagging indicator” showing a level of activity that has already happened and that “other reports will follow”, notably that of inflation (CPI) next week.
The fact remains that with the increase in new hires, the drop in the unemployment rate by 0.1 point to 3.5% and most importantly the increase in hourly wages (+5.2% yoy), the stock market was hardly happy, like investors fears the central bank could tighten further to calm an overheated economy that is fueling inflation.
“This data is definitely stronger than expected. The market got the idea after the Federal Reserve’s last meeting in July that it would change course and do less,” said TD Securities’ Mazen Issa.
“But these numbers contradict that version and speak much more of an economy that needs to be contained,” he added.
– interest rate tensions –
Bond yields rose sharply, pushing the greenback higher.
Yields on 10-year notes stood at 2.82% as of 19:00 GMT compared to 2.68% the day before and those on 2-year notes rose to 3.24% from 3.04%, the highest since March 20. July, before the last Fed meeting.
Better than the start of the session, however, five of S&P’s 11 sectors ended in the green, most notably Energy (+2.04%), while crude oil prices edged higher on Friday.
American media and streaming giant Warner Bros Discovery was penalized (-16.53%), HBO’s parent company, for reporting lower-than-expected sales and citing losses.
Tesla fell 6.63% to $864.51 as its shareholders’ meeting approved an upcoming tripartite split of its stock.
New developments have also emerged in the legal dispute with Twitter, when Elon Musk withdrew his plan to take over the social network. The billionaire has accused Twitter in court of “cheating” on the number of its monetizable users.
Twitter stock rose 3.56% to $42.52.
Meta (Facebook), which announced a day before the next launch of a massive loan for the first time in its history on the market, lost 2.03% to $167.11.
The group has also decided to temporarily pause its plan to acquire Within, a specialist in virtual reality, because the US competition authority FTC does not see this acquisition in a good light.
Lyft, Uber’s competitor for self-driving car rentals, rose 16.62% to $20.28 after ridership returned to pre-pandemic levels and reported the highest quarterly gains in its history.
For the week, the flagship stock index, the Dow Jones, was virtually flat (-0.13%), the tech-dominated Nasdaq rose 2.15%, and the S&P 500, the US market’s most representative index, nibbled 0.36%.