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As A Blowout, The Dow Drops 100 Points. The January Jobs Report Indicates The Fed Will Keep Raising Rates

Friday saw a decline in stocks as investors weighed positive U.S. labor market statistics and a number of prominent earnings failures.

109 points, or around 0.4%, were lost by the Dow Jones Industrial Average. The Nasdaq Composite sank 1.8%, while the S&P 500 fell 1.1%.

Investors accepted a January jobs data that was significantly greater than anticipated. In January, the U.S. economy added 517,000 jobs, far exceeding the Dow Jones forecast of 187,000 new employments.

“Today will really put to the test whether we can interpret positive economic statistics as being positive for markets. The initial response to these noticeably better jobs number is subdued. Markets would have crashed if we had seen an explosive jobs report like this in the middle of the hiking cycle. As the rising cycle draws to a close, good news may start to be seen positively, according to Art Hogan of B. Riley Financial.

Hogan continued, “I think we’re now getting to the point where we can react intuitively to economic data, and today might be an illustration of that.

At the same time, the market was affected by the troubles of significant tech stocks. For their December quarters, Apple and Alphabet, the parent company of Google, both fell short of top and bottom-line projections. Apple shares decreased 0.8% while Alphabet’s stock dropped around 4%. Following the e-commerce behemoth’s report, Amazon’s stock likewise fell more than 5%.

Outside of technology, the earnings picture wasn’t much better, with Ford and Starbucks

also, inaccurate estimates. Both of those equities decreased by more than 9% and 3%.

Despite everything, the S&P 500 and the Nasdaq Composite are expected to have a good week. The losses from some disappointing results were partially mitigated by recent indications of declining inflation and some well-received remarks this week from Federal Reserve Chair Jerome Powell.

The Nasdaq Composite outperformed the other main indices this week, rising more than 3% on a tech-driven rally. It’s going to be its fifth straight week of success. The S&P 500 is up more than 1% in the meanwhile.

The significant exception, though, was the Dow, which fell 0.1% this week.

Source (CNBC)



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