4:05pm: December payrolls sink Wall Street
At the close, the S&P 500 closed down 0.4% at 4,677 points, while the Nasdaq slipped nearly 1% to finish at 14,936 points. The Dow almost managed to eke out a gain but just missed it by the close, instead finishing flat at 36,232 points.
12:05pm: US stocks in red
The US stock market continued to be mixed around midday on the last day of the week, mostly trading in red as the latest nonfarm payrolls report further sparked weakness in equities.
At noon, the S&P 500 and tech-heavy Nasdaq Composite traded lower, declining by 0.2% and 0.5%, respectively. The only slightly better-performing index, Dow Jones Industrial Average gained 81 points or 0.2% at 36,317 after a slow start.
“Once again investors have been taught not to follow the ADP report too closely – Wednesday’s stellar figure contrasts sharply with the lacklustre headline number in today’s NFPs,” said Chris Beauchamp, chief market analyst at IG, a global leader in online trading. “But it is not the headline we should be worried about – this time it’s the sharp drop in the unemployment rate and the bounce in earnings that has caused the lurch lower in stocks.”
The analyst noted that a Federal Reserve rate hike in March is now a very real possibility, “thanks it seems to the rude health in which the US economy finds itself.”
Next week will provide no respite to the inflation reporting for the first half, with both the Chinese and US Consumer Price Index on the calendar, Beauchamp said.
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9.56am: US stocks make muted start
US stocks were trading mainly ahead on Friday, having taken a tumble just after the New York bell, as traders mulled over the latest nonfarm jobs print.
The Dow Jones Industrial Average added around 12 points at 36,249.
The broader-based S&P 500 gained nine points at 4,705 and the tech-laden Nasdaq added 63 points at 15,143.
The US created 199,000 jobs in December, 2021, while expectations had been for a 422,000 rise for the month. The lower than expected figure underlined the tight labor market and the impact of the spread of omicron on the jobs market.
Craig Erlam, analyst at Oanda said the data was not "offering investors much chance for relief and the jobs report is just another example of that".
"The headline NFP miss was never going to generate too much relief as signs of tightness elsewhere is always going to take priority," he said.
"That said, investors may feel they've dodged a bullet as the million new jobs that some predicted could have further convinced policymakers that the US is close to, or at, full employment."
8.55am: Payrolls below forecast but wages rise
US stock futures turned negative after US non-farm payrolls rose by only 199,000 in December, well below forecasts, while the unemployment rate fell to 3.9%.
Payrolls were expected to have expanded by more than 400,000 last month after gains of 210,000 in November.
However, average hourly earnings rose by 0.6% in December, higher than forecast, and up from an upwardly-revised 0.4% in November.
In an initial reaction, Walid Koudmani, an analyst at XTB Market commented: "The US report showed weaker job gains than expected, deceleration in wage growth was smaller than expected, hinting that inflationary pressures may persist for some time.
"US unemployment dropped below 4% which could further boost the Fed's confidence in the economy and ultimately lead to an adjustment of their fiscal and monetary policy sooner than expected, a factor which some investors may find concerning."
After trading higher earlier, futures for the Dow Jones Industrial Average declined 0.13% followng the release, while those for the broader S&P 500 index shed 0.2% and contracts for the tech-heavy Nasdaq 100 fell 0.55%.
6.30am: US stocks seen opening up
US stocks are expected to start Friday trade higher ahead of a jobs report, due for release before the market opens, which may support the Federal Reserve’s decision to bring forward tighter monetary policy.
Futures for the Dow Jones Industrial Average rose 0.14% in pre-market trading, while the broader S&P 500 index gained 0.25% and those for the tech-heavy Nasdaq 100 added 0.32%.
Stocks closed lower on Thursday, a day after a massive sell-off in tech stocks as the Fed signaled an end to its easy-money policies, including raising interest rates and reducing the size of its balance sheet, catching the market off guard.
The Dow fell 0.47% to 36,236 and the S&P dropped 0.1% to 4,696, while the Nasdaq declined 0.13% to 15,081.
“(The) selloff in equities stabilizes, with the S&P500 and Nasdaq closing the day with minor losses only,” commented Ipek Ozkardeskaya, senior analyst at Swissquote.
“US and European stock futures turned positive in the overnight trading session, hinting at consolidation before the weekly closing bell.”
Ahead of the non-farm payrolls data, Ozkardeskaya noted that the ADP jobs report on Wednesday revealed a much better than expected number with a print of 800,000 new private jobs in December.
“Today, the NFP is expected to reveal that the US economy added 400,000 new non-farm jobs. But the jobs data doesn’t matter much for the Fed policy expectations right now; what matters for the Fed is inflation,” she added.
“However, a strong NFP print, and a beat on the unemployment rate, have the power of boosting the Fed hawks, on the idea that the US jobs market no longer needs the Fed’s support, and the Fed could pull away support faster if it believes that there is no harm for the jobs leg of the equation.”