Market Snapshot: Stocks slip for second day after January jobs report

by | Feb 6, 2023 | Stock Market

U.S. stocks were off session lows but suffering a second day of losses Monday, after an unexpectedly strong jobs report at the end of last week renewed worries about how high the Federal Reserve will have to take interest rates.What’s happening
The Dow Jones Industrial Average
was down 60 points, or 0.2%, at 33,870.

The S&P 500
fell 26 points, or 0.6%, to 4,110.

The Nasdaq Composite
shed 99 points, or 0.8%, to trade at 11,909.

Stocks fell Friday, but the Nasdaq Composite advanced for a fifth straight week, while the S&P 500 saw back-to-back weekly gains. The Dow fell 0.2% last week.

What’s driving markets There continued to be shock over the 517,000 surge in nonfarm payrolls reported by the Labor Department on Friday. “On the one hand, a resilient labor market could buttress households’ willingness and ability to continue consuming and therefore support corporate earnings and equities over the near term,” said Rouyaka Ibrahim, an analyst at BCA Research. But longer-term implications are more dire — if a second wave of inflation is triggered, the Fed would have to act more forcefully, perhaps leading to a deep recession, she said. The yield on the 10-year Treasury
rose nearly 11 basis points to 3.643%. Fed-funds futures reflected increased bets the Fed will deliver a 25 basis point increase in May after a widely expected hike of the same magnitude in March. The Fed last week hiked the fed-funds rate by 25 basis points to a range of 4.5% to 4.75%. Read: How a hot jobs report ‘moved the goal post’ on interest-rate expectations The dollar was also extending a bounce from late last week, with the ICE U.S. Dollar Index
up 0.8%. See: How the U.S. dollar could put this stock-market rally to a big test “While there were some promising aspects of the jobs report — cooling wage growth and higher participation — it’s impossible to ignore the fact that the labor market remains red hot,” said Craig Erlam, s …

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