WASHINGTON (dpa-AFX) - After moving notably higher over the two previous sessions, stocks have moved back to the downside during trading on Friday. The major averages have all slid into negative territory after initially showing a lack of direction.
Currently, the major averages are just off their lows of the session. The Dow is down 369.36 points or 0.7 percent at 53,316.75, the Nasdaq is down 100.84 points or 0.4 percent at 26,483.22 and the S&P 500 is down 33.42 points or 0.4 percent at 7,714.29.
The weakness that has emerged on Wall Street comes amid renewed concerns about the outlook for interest rates following the release of much stronger-than-expected U.S. jobs data.
Before the start of trading, the Labor Department released a report showing employment increased by much more than expected in the month of August.
The report said non-farm payroll employment surged by 162,000 jobs in August are rising by an upwardly revised 21,000 jobs in July.
Economists had expected employment to climb by 55,000 jobs compared to the loss of 23,000 jobs originally reported for the previous month.
Treasury yields jumped in reaction to the report, as the strong data could make the Federal Reserve more comfortable about raising interest rates later this month in an effort to fight sticky inflation.
According to CME Group's FedWatch Tool, the chances the Fed will raise rates by a quarter point have bounced back to 60.4 percent after falling below 50 percent on Thursday.
'Although it's not a given that the Fed will raise rates on September 16th, especially given the optics of a national election less than 2 months after the meeting, there are plenty of reasons to raise interest rates (to fight inflation) and less reasons to keep rates unchanged (to support the labor market),' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
He added, 'We will be watching to see if the stock market shakes this off and rallies into the close before the long weekend, because that will indicate the optimism around the AI build-out - and extremely strong corporate earnings - are the most important factors, and Fed rate changes are less important for investor psychology.'
Sector News
Software stocks have pulled back sharply after seeing substantial strength on Thursday, as reflected by the 2 percent slump by the Dow Jones U.S. Software Index.
Considerable weakness is also visible among oil service stocks, as reflected by the 1.4 percent loss drop by the Philadelphia Oil Service Index.
Gold, pharmaceutical and biotechnology stocks are also seeing notable weakness, while semiconductor stocks have moved sharply higher, driving the Philadelphia Semiconductor Index up by 3.3 percent.
Airline and computer hardware stocks are also seeing some strength on the day, helping to limit the downside for the broader markets.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region ended mixed on Friday. While Hong Kong's Hang Seng Index surged by 1.7 percent and Japan's Nikkei 225 Index jumped by 1.3 percent, China's Shanghai Composite Index fell by 0.3 percent.
The major European markets are also turning in a mixed performance. The German DAX Index is up by 0.1 percent, while the U.K.'s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is down by 0.2 percent.
In the bond market, treasuries have climbed well off their lows but remain in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.6 basis points at 4.778 percent.
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