Wall St falls as ADP jobs beat sparks of fears

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, United States, September 29, 2021. REUTERS / Brendan McDermid

  • Top 11 S&P 500 sector indices down
  • ADP shows recovery in private jobs in US in September
  • American Airlines and Nucor fall on GS downgrades
  • Falling indices: Dow 0.92%, S&P 0.88%, Nasdaq 0.73%

October 6 (Reuters) – U.S. stock indices fell on Wednesday after a sharp rise in private jobs in September fueled concerns of an earlier-than-expected easing of monetary stimulus amid growing concerns of higher inflation. high.

ADP’s national employment report showed private payrolls increased by 568,000 jobs last month. Economists polled by Reuters predicted an increase of 428,000 jobs. Read more

In short, it looks like the job gain will be labeled ‘decent,’ which is the threshold that Fed Chairman Jerome Powell has suggested moving forward with an announcement to phase out QE at the meeting at the end of November, “said Paul Ashworth, head of the United States. economist at Capital Economics.

The numbers precede Friday’s more comprehensive non-farm wage data, which should bolster arguments for slowing asset purchases by the Federal Reserve.

The US 10-year benchmark yield hit its highest level since June earlier in the session, putting pressure on shares of mega-cap growth companies including Apple Inc (AAPL.O), Facebook (FB.O) ), Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O), which fell between 0.5% and 1.9% after posting a strong rebound on Tuesday.

The top 11 sector indices of the S&P 500 were trading lower, with financials (.SPSY) and industrials (.SPLRCI) down 1.0% each.

Oil prices hit multi-year highs earlier in the day, fueling fears that major central banks would tighten monetary policy to counter sharp price hikes. However, oil prices retreated from those highs, while the S&P 500 (.SPNY) energy sector slipped 2.4%.

A standoff over Republicans and Democrats over the debt limit has shown no sign of slowing down, with President Joe Biden saying his Democrats could make an exception to a US Senate rule to allow them to extend the government borrowing power without the help of Republicans. Read more

“We are at an impasse in Washington and we are precariously approaching the deadline for raising the debt ceiling,” said Art Hogan, chief market strategist at National Securities in New York.

“And that’s the first thing that frustrates investors the most, but very close behind is the fact that inflationary pressures are likely to kick in during the third quarter earnings season, which begins next week. “

Until Tuesday’s close, the S&P 500 Index (.SPX) recorded its fourth consecutive day of 1% movements in either direction. The last time the index saw this much volatility was in November 2020, when it rose or fell 1% or more for seven consecutive sessions.

At 9:55 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 316.84 points, or 0.92%, to 33,997.83, the S&P 500 (.SPX) was down 38.30 points, or 0.88%, to 4,307.42 and the Nasdaq Composite (.IXIC) is down 105.65 points, or 0.73%, to 14,328.19.

American Airlines Group (AAL.O) fell 4.8% after Goldman Sachs downgraded its rating on the carrier to “sell” from “neutral.”

Shares of steelmaker Nucor Corp (NUE.N) fell 3.2% after Goldman Sachs downgraded its rating to “neutral” instead of “buy”.

Falling issues outnumbered advances for a 4.33-to-1 ratio on the NYSE and a 3.35-to-1 ratio on the Nasdaq.

The S&P Index recorded no new 52-week highs and seven new lows, while the Nasdaq recorded eight new highs and 125 new lows.

Reporting by Sruthi Shankar, Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Saumyadeb Chakrabarty and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

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