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Wall St slips as jobs data dents hopes for Fed rate deceleration

Economy Nov 01, 2022 06:21PM ET
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© Reuters. FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid
 
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By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks closed lower for a second straight session on Tuesday after data indicating that the labor market remained on solid ground dimmed hopes the Federal Reserve might have enough reason to begin reducing the size of its interest rate hikes.

A survey showed U.S. job openings unexpectedly rose in September, suggesting that demand for labor remains strong even as the central bank has embarked on a path of aggressive rate hikes in an effort to bring down stubbornly high inflation.

Investors have been paying close attention to labor market data for any signs of weakening in the job market, as decreasing wage pressures and easing demand would help reduce inflation, giving the Fed the ammunition to begin decelerating with a 50-basis-point rate hike in December.

Growing expectations the central bank may have enough justification to begin slowing in December -- partly due to data pointing to a weakening economy and a corporate earnings season that has been better than expected -- helped stocks rally in October, with the Dow notching its biggest monthly percentage gain since 1976.

The sharp focus on labor market data overshadowed another report which showed U.S. manufacturing activity grew at its slowest pace in nearly 2-1/2 years in October as rising rates cool demand for goods and pricing pressures on manufacturers lessened.

"That is the concern for the market is we know the Fed wants to slow down the labor market, they want to slow down hiring so demand drops in the economy, which will help inflation," said Anthony Saglimbene, chief market strategist at Ameriprise Financial (NYSE:AMP) in Troy, Michigan.

"From an employment standpoint things look really robust though, and that is putting some pressure on stocks."

The Dow Jones Industrial Average fell 79.75 points, or 0.24%, to 32,653.2, the S&P 500 lost 15.88 points, or 0.41%, to 3,856.1 and the Nasdaq Composite dropped 97.30 points, or 0.89%, to 10,890.85.

The Fed is set to release its policy statement at 2 p.m. EDT (1800 GMT) on Wednesday, and investors will be closely eyeing any signals in the statement or comments from Fed Chair Jerome Powell afterward that the central bank is contemplating decreasing its rate hikes.

Energy, up 0.99% was the best-performing S&P sector, lifted by a gain in crude prices on an unverified report that China was considering lifting its strict COVID-19 regulations.

That also helped boost U.S.-listed shares of Chinese firms such as JD (NASDAQ:JD).Com, up 3.08% and Alibaba (NYSE:BABA) Group Holding, which gained 3.59%.

Megacap growth names such as Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL), which have struggled since the Fed began raising interest rates, were once again under pressure, falling 5.52% and 1.75%, respectively.

Uber Technologies (NYSE:UBER) surged 11.97% after giving an upbeat fourth-quarter profit view that also lifted shares of its peers Lyft Inc (NASDAQ:LYFT), up 3.48% and DoorDash, up 3.61%.

Pfizer (NYSE:PFE) rose 3.14% after the drugmaker raised full-year sales estimates for its COVID-19 vaccine, while Eli Lilly (NYSE:LLY) fell 2.63% after trimming its profit forecast.

Volume on U.S. exchanges was 11.11 billion shares, compared with the 11.45 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.56-to-1 ratio; on Nasdaq, a 1.29-to-1 ratio favored advancers.

The S&P 500 posted 24 new 52-week highs and eight new lows; the Nasdaq Composite recorded 120 new highs and 110 new lows.

Wall St slips as jobs data dents hopes for Fed rate deceleration
 

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Comments (25)
Jay Garrelts
Jay Garrelts Nov 02, 2022 2:20AM ET
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Creating money and stock buybacks that’s solid financial decisions lol
Kerry Ditto
Kerry Ditto Nov 01, 2022 7:28PM ET
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Win & Win situation. if dems lose midterm election, political gridlock will push stock market higher. if they win, massive fiscal stimuli will push the market higher. plus post halloween push will help as well.
Ajib Hitan
Ajib Hitan Nov 01, 2022 7:28PM ET
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You talk like youre drunk ****
First Last
First Last Nov 01, 2022 7:28PM ET
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"massive fiscal stimuli" has and will again happen under Republicans.  The difference is they will give free $ to more targeted & different groups of Americans and they will cut taxes to the rich and corporations to NOT pay for that free $.
Thejasvi K R
Thejasvi K R Nov 01, 2022 6:37PM ET
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this is a very sick expectation by Feds and investors to hope people go jobless.. Rather work on increasing the supply and fixing the supply chain you lazy feds..you would create more jobs that way and reduce the inflation...
Kerry Ditto
Kerry Ditto Nov 01, 2022 4:17PM ET
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Post-Halloween rally begins now. Massive stock market rally is on regardless Fed. Fed is irrelevant.
First Last
First Last Nov 01, 2022 4:17PM ET
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"Fed is irrelevant"  --  and yet so many on here whining about the Fed.
Luke Knoep
Luke Knoep Nov 01, 2022 4:17PM ET
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Werent you just crying about how the Fed is evil and wants us all to suffer and how you’re so much smarter than them
First Last
First Last Nov 01, 2022 3:41PM ET
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That video can show if it's true or not, NOT if it's random or not.  And it IS random and irrelevant to this article.
Mitchel Pioneer
Mitchel Pioneer Nov 01, 2022 2:59PM ET
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The "late trade" fraud unfolds predictably as ever.  Remarkable how there's no profit taking during "rallies," yet the knife catchers come out of the woodwork during every loss.  Criminally manipulated JOKE.
First Last
First Last Nov 01, 2022 2:59PM ET
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What "late trade"?  Market is still in a flat channel since morning.
Kerry Ditto
Kerry Ditto Nov 01, 2022 2:49PM ET
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maybe dems will have mid-term election wins, but stock market will fall
Luke Knoep
Luke Knoep Nov 01, 2022 2:49PM ET
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Your reasons for thinking this?
dhurjati maitra
dhurjati maitra Nov 01, 2022 2:26PM ET
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Powell or Putin the US markets will manage to rise even if considered on a short term basis.
Warm Camp
Warm Camp Nov 01, 2022 2:26PM ET
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The market goes down after Election Day, disregarding politics or whatever else.
Globepay Teams
Globepay Teams Nov 01, 2022 2:07PM ET
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Yeah
Warm Camp
Warm Camp Nov 01, 2022 1:58PM ET
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The dip is very small. The whole WS and media wait for Powell to say just anything remotely resembling “pivot” tomorrow, and most likely they will be able to find it, even if Powell say nothing.
Stephen Fa
Stephen Fa Nov 01, 2022 1:58PM ET
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I can't imagine how many Democrat leaders and their lobbying support (bank CEOs, etc.) are calling privately the FOMC members.
Warm Camp
Warm Camp Nov 01, 2022 1:58PM ET
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Stephen Fa  Perhaps, your guess is correct; though this can be done without FOMC members doing anything material, or even without saying anything factual.
First Last
First Last Nov 01, 2022 1:58PM ET
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Stephen Fa   Let's at least have some semblance of evidence before the fud & trash-talking other people starts.
Luke Knoep
Luke Knoep Nov 01, 2022 1:58PM ET
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