Sun, Sep 08, 2019 - Page 14 News List

Wall St inches up on job data

HOLDING STEADY:Jerome Powell said the US is not likely to fall into recession, but investors bet that the US Federal Reserve would cut 25 basis points this month

Reuters, NEW YORK

Graph: AP

The S&P 500 and Dow industrials closed slightly higher on Friday as investors digested a mixed US jobs report and bet on a US Federal Reserve interest rate cut this month, while China’s stimulus plan helped ease some concerns around global growth.

US job growth slowed more than expected in last month, with retail hiring declining for a seventh straight month, but this was countered by strong wage gains that are expected to support consumer spending and keep the economy expanding moderately amid rising threats from trade tensions.

Also on Friday, speaking at the University of Zurich, Fed Chairman Jerome Powell said the labor market was strong and the central bank would continue to “act as appropriate” to sustain economic expansion.

He also said that the US and the world economy are not likely to fall into recession.

“The report showed steadiness in the job market, albeit not a lot of growth. The jobs report gave enough weakness for the Fed to cut 25 basis points this month, but not enough that the Fed would start flashing a recession warning,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “Until we get into October and there’s solid company data again, the market’s going to be gyrating based on economic and geopolitical headlines.”

Earlier, China’s central bank said it would slash the amount of cash that banks must hold as reserves, releasing a total of 900 billion yuan (US$126.5 billion) in liquidity to shore up the flagging economy.

The Dow Jones Industrial Average on Friday rose 69.31 points, or 0.26 percent, to 26,797.46; the S&P 500 gained 2.71 points, or 0.09 percent, to 2,978.71; and the NASDAQ Composite dropped 13.75 points, or 0.17 percent, to 8,103.07.

For the week, the S&P 500 rose 1.79 percent, while the Dow added 1.49 percent and the NASDAQ gained 1.76 percent.

Of the S&P 500’s 11 major sectors, eight ended the day with gains. Healthcare was the biggest boost with a 0.3 percent increase, while the technology sector was the biggest drag with a 0.2 percent drop.

The communication services sector was also under pressure as Facebook Inc slipped 1.8 percent after US state attorneys general said they would investigate if the social media giant stifled competition and put users at risk.

The US Department of Labor ‘s non-farm payroll data showed the economy added 130,000 jobs in August, below expectations for a gain of 158,000, according to a Reuters survey of economists.

While average hourly earnings gained 0.4 percent last month in the largest increase since February, the annual increase dipped to 3.2 percent from 3.3 percent in July.

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