Major US stock indices on Friday closed lower after surprisingly strong jobs data sparked concerns about aggressive US Federal Reserve action, while investors digested a mixed bag of megacap company earnings reports.
The S&P 500 still posted a gain for the week, which included a string of major market events, and stood not far from five-month highs.
The NASDAQ tallied its fifth straight weekly rise, its longest such streak since late 2021.
US job growth accelerated sharply last month, with nonfarm payrolls surging by 517,000 jobs, well above an estimate of 185,000. The unemployment rate hit a more than 53-and-a-half-year low of 3.4 percent.
In another sign of economic strength, US services industry activity rebounded strongly last month.
Investors have been balancing hopeful signs that the economy could avoid a feared recession against concerns about how long the Fed would keep interest rates high to rein in inflation. The S&P 500 gained earlier this week after comments that were more dovish than expected from US Fed Chairman Jerome Powell, who acknowledged progress in the fight against inflation.
Photo: Reuters
The jobs report “was an incredible surprise and it raises a lot of questions about what the Fed is going to do next,” Invesco chief global market strategist Kristina Hooper said. “What I think is causing some of the volatility is markets trying to make sense of how the Fed will perceive this.”
The Dow Jones Industrial Average fell 127.93 points, or 0.38 percent, to 33,926.01; the S&P 500 lost 43.28 points, or 1.04 percent, to 4,136.48; and the NASDAQ Composite Index dropped 193.86 points, or 1.59 percent, to 12,006.96.
For the week, the S&P 500 rose 1.62 percent, the Dow slipped 0.15 percent and the NASDAQ gained 3.31 percent.
Wall Street’s main indices have had a solid start to the year as tech and other stocks that struggled last year have rebounded, fueled by hopes that the Fed’s rate hikes would soon end and the economy might be able to navigate a soft landing.
“So many things were trading at bargain-basement prices three, four months ago,” North Star Investment Management Corp chief investment officer Eric Kuby said. “That has gone away... I think we are in a fair game now.”
On Friday, investors were also digesting another heavy batch of corporate results.
Shares of Apple Inc, the largest US company by market value, rose 2.4 percent. The company forecast that revenue would fall for a second quarter in a row, but that iPhone sales were likely to improve as production had returned to normal in China.
Shares of Amazon.com Inc slumped 8.4 percent as the company said operating profit could fall to zero in this quarter as savings from layoffs do not make up for the financial effect of consumers and cloud customers clamping down on spending.
Alphabet Inc shares dropped 2.7 percent after the Google parent posted fourth-quarter profit and sales short of Wall Street expectations.
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