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It was jobs Friday, and Wall Street digested a mixed report on the labor market in December, which showed fewer than expected jobs gains and slower wage growth but persistently low levels of unemployment. Stocks reversed to the downside after initially hitting record highs.
4 p.m. ET: Stocks end lower; Dow falls 133 points
Stocks reversed midday and ended lower Friday, after hitting new record highs intraday. Geopolitical turmoil in the Middle East injected uncertainty into markets all week— which investors shrugged off as the Dow briefly set a new record above 29,000.
Nevertheless, the major indices ended the week positive. The S&P 500 rose 0.94%, while the Dow was 0.66% higher and the Nasdaq jumped 1.75% to close out a tumultuous week.
Here’s how the markets settled at the end of regular trading Friday:
S&P 500 (^GSPC): -0.29% or -9.37 points to 3,265.33
Dow (^DJI): -0.46% or -133.33 points to 28,823.57
Nasdaq (^IXIC): -0.27% or -24.57 points to 9,178.86
Crude oil (CL=F): -0.76% or -$0.45 to $59.11 a barrel
Gold (GC=F): +0.43% or +$6.70 to $1,561 per ounce
3:18 p.m. ET: Stocks decline, pulling back from record highs
Stocks held in the red in the final hour of trading.
The financial sector led declines in the S&P 500, while real estate, utilities and health-care held in positive territory. Declines in the Dow were led by Boeing, after new reports revealed internal communications that suggested employees were aware of issues with the 737 Max aircraft before two deadly crashes took place over the past year.
Here were the main moves in markets, as of 3:18 p.m. ET:
S&P 500 (^GSPC): -0.22% or -7.07 points to 3,267.63
Dow (^DJI): -0.37% or +106.79 points to 28,850.11
Nasdaq (^IXIC): -0.22% or -20.21 points to 9,183.06
Crude oil (CL=F): -0.96% or -$0.57 to $58.99 a barrel
Gold (GC=F): +0.37% or +$5.80 to $1,560.10 per ounce
3:11 p.m. Casper Sleep files for IPO
Online mattress retailer Casper Sleep has filed paperwork for an initial public offering, but faces some of the challenges that have dogged big companies like Slack and Uber: Tougher competition and wide losses.
The size of its planned offering could be as much as $100 million, a placeholder that will likely change. The share sale is being led by Morgan Stanley, Goldman Sachs Group Inc. and Jefferies Financial Group Inc.
12:37 p.m. Wall Street reverses course
Stocks pulled back from record levels around noon in New York, retreating from all-time highs hit earlier in the session.
Here were the main moves in markets, as of 12:37 p.m. ET:
S&P 500 (^GSPC): -0.07% or -2.4 points to 3,272.30
Dow (^DJI): -0.24% or +69.85 points to 28,887.05
Nasdaq (^IXIC): -0.08% or -7.57 points to 9,196.37
Crude oil (CL=F): -0.69% or -$0.41 to $59.15 a barrel
Gold (GC=F): +0.43% or +$6.70 to $1,561.00 per ounce
11:07 a.m. Trump administration announces new sanctions on Iran
The U.S. is imposing new sanctions on Iranian metal exports and eight senior Iranian officials in response to an attack from Tehran earlier this week on Iraqi military bases housing U.S. targets.
Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin announced the sanctions in a press conference Friday morning in Washington, D.C., and the Department of the Treasury reiterated the move in a press release.
“The United States is targeting senior Iranian officials for their involvement and complicity in Tuesday’s ballistic missile strikes,” Mnuchin said in the statement. “We are also designating Iran’s largest metals manufacturers, and imposing sanctions on new sectors of the Iranian economy including construction, manufacturing, and mining. These sanctions will continue until the regime stops the funding of global terrorism and commits to never having nuclear weapons.”
10:30 a.m. Kudlow says trade deal ready for Jan 15 deadline
Via Reuters, the Phase 1 U.S.-China trade deal is on track to be signed Jan. 15, White House economic adviser Larry Kudlow told Fox Business Network on Friday.
10:06 a.m. ET: Dow hits 29,000
The Dow and Nasdaq joined the S&P 500 and hit record highs Friday morning. The 30-stock index crossed the 29,000 level for the first time ever, reaching as high has 29,009.07 as of 10:06 a.m. ET.
9:32 a.m. ET: S&P 500 opens at record high
The blue-chip index rose to a fresh record high, shrugging off a mixed jobs report earlier in the session.
Here were the main moves in markets, as of 9:32 a.m. ET:
S&P 500 (^GSPC): +0.17% or +5.45 points to 3,280.15
Dow (^DJI): +0.03% or +7.86 points to 28,964.76
Nasdaq (^IXIC): +0.21% or +18.35 points to 9,221.09
Crude oil (CL=F): -0.97% or -$0.58 to $58.98 a barrel
Gold (GC=F): -0.09% or -$1.40 to $1,552.90 per ounce
9:15 a.m. ET: Jobs still solid, but slower payrolls growth seen ‘inevitable’
Wall Street economists aren’t overreacting to the December jobs report, which checked in at a solid yet disappointing 145,000 last month. Capital Economics notes that the U.S. economy is still generating more positions than what’s needed to keep up with new workers — even as earnings growth turns muted:
The potentially worse news is that we know there will be big downward revisions to past months’ payroll gains as part of the benchmark revisions, due to be released in the January Employment Report. But with much of the recent survey evidence suggesting that the underlying pace of hiring is bouncing back, and jobless claims low, the improvement in the pace of payroll gains over the past six months or so is unlikely to be revised away entirely.
Overall, the solid jobs figures add to the evidence from the incoming activity data, which suggest the economy is nearing a turning point, with economic growth likely to bottom out close to 2.0% annualised and reaccelerate back above trend in the second half of 2020.
8:55 a.m. ET: Stock futures flat after jobs data letdown
Major benchmarks flattened after December nonfarm payrolls missed expectations, with the economy creating 145,000 jobs (versus the 160K expected by Wall Street). That said, the unemployment rate held steady at 3.5% and the miss wasn’t that large — which means investors will likely take the numbers in stride when the market opens for trading.
8:08 a.m. ET: Here’s a look at what analysts are saying before the jobs report
Most analysts are optimistic that the December jobs report will show still-strong hiring trends to cap off 2019. However, they anticipate the overall pace of employment growth will slow compared to 2018, when job gains averaged 227,000 per month. An in-line print Friday would bring 2019’s average for non-farm payroll additions to 178,000 per month.
Here’s what some analysts said in notes ahead of the December jobs report:
Lewis Alexander, Nomura: “We forecast a 155k increase in non-farm payrolls in December, a slowdown relative to November’s likely unsustainable pace, with some upside risk. Business surveys suggest steady hiring activity but at a pace that remains consistent with a slowing trend. We expect average hourly earnings to rise 0.2% m-o-m, lowering the y-o-y rate 0.1pp to 3.0%. Finally, we think the unemployment rate will hold at 3.5% as the job finding rate shows some signs of softening.”
Jan Hatzius, Goldman Sachs: “We estimate non-farm payrolls increased 185k in December, above consensus of +160k. Our forecast reflects solid employment fundamentals, a rebound in retail job growth related to the late Thanksgiving, and a weather-related rebound in the Midwest after winter storms during the November survey period. We also note that December job growth tends to remain strong in tight labor markets, as labor supply constraints may incentivize firms to reduce end-of-year layoffs.”
Daniel Silver, JPMorgan: “We forecast that non-farm employment increased 125,000 in December, while the unemployment rate held at 3.5%. We think the unusual holiday alignment in recent months will generate some seasonal distortions that depress the December jobs count. We see evidence of similar distortions in the jobless claims data, as recent weekly changes have aligned closely with what occurred in comparable periods in 2013/2014 (the latest instance with the timing of holidays that matches what occurred this past holiday season).”
James Knightley, ING: “The November report showed job creation well ahead of expectations, but slower growth is likely in December. Moreover, labor market slack is greater than implied by the unemployment alone, meaning wage growth will remain subdued. The net result implies little upside threat for interest rates.”
Jay Bryson, Wells Fargo Securities: “We look for the pace of non-farm hiring to slow in December, with employers adding 150,000 jobs. Secondary labor market indicators continue to suggest a slower pace of hiring in 2020. Layoffs rose in December, though they remain low and consistent with a tight labor market. Job openings, however, have rolled over and small business hiring plans remain below last year’s level.”
7:38 a.m. ET: S&P 500 looks to open at new record ahead of jobs report
Stocks pointed to a higher open Friday as investors awaited the Labor Department’s December jobs report. S&P 500 futures held above the index’s all-time high reached Thursday.
Here were the main moves during the pre-market session, as of 7:38 a.m. ET:
S&P futures (ES=F): 3,283.50, up 7.5 points or 0.23%
Dow futures (YM=F): 28,979, up 50 points or 0.17%
Nasdaq futures (NQ=F): 9,046, up 37 points or 0.41%
Crude oil (CL=F): $59.70 per barrel, up $0.14 or 0.24%
Gold (GC=F): $1,550.40 per ounce, down $3.90 or 0.25%
Consensus economists expect the U.S. economy added 160,000 new jobs in December, according to Bloomberg-compiled data. The economy had added 266,000 payrolls in November, which was boosted by the return to work of General Motors employees who had been on strike between September and October.
The unemployment rate is expected to hold at 3.5%, a five-decade low. And wages are expected to have risen modestly, up 0.3% month on month and 3.1% year on year.