U.S. Stocks Retreat After Jobs Report

By Anonymous

The S&P 500 extended its weekly losses Friday after the August jobs report showed a pickup in hiring and healthy wage growth, bolstering the case for the Federal Reserve to continue raising rates at its current pace.

The S&P 500 fell 0.1% in recent trading, putting its weekly decline at 0.9%. The Dow Jones Industrial Average edged down 0.3%, while Nasdaq Composite rose 0.2%.

The August report showed a pickup in wage growth, a metric that is closely watched by the Federal Reserve as an indicator of inflation. The rise in wages could encourage more short-term rate increases from the Fed, some analysts said.

“We could see some jitters in markets,” said Kristina Hooper, chief global market strategist for Invesco, noting that earlier this year, the last time wages grew at nearly as high a pace, it caused some turmoil in the stock market. “If inflation is going up too much, instead of the Fed pausing, it could need to tighten more.”

Labor Department data showed the U.S. added 201,000 jobs in August, ahead of forecasts for 192,000 additional jobs. Average hourly earnings were up 2.9% from a year earlier, while the unemployment rate held steady.

Technology stocks recovered slightly following a rough few days for the group that included Senate hearings for internet companies and steep declines for semiconductor companies. Shares of Amazon.com , Twitter, Facebook and Netflix were all higher in recent trading, though the S&P 500 technology sector remains on track to end the week down roughly 2.3%.

Yields on 10-year U.S. Treasurys edged higher to 2.927%, up from 2.886% ahead of the jobs report and 2.877% Thursday. Yields move inversely to prices.

The dollar turned higher against a basket of currencies; the ICE Dollar Index was recently up 0.1%, buoyed by gains against the euro and yen.

Around the globe, fears of contagion in emerging markets and ongoing trade tensions have helped push Asian and European stocks lower this week, with most major indexes set to close with a weekly loss. On Thursday, the MSCI Emerging Markets Index fell into bear market territory, defined as a 20% drop from a recent peak.

The Stoxx Europe 600 fell less than 0.1%, with the banking and travel-and-leisure sectors leading declines.

Shares in Deutsche Bank fell 1.8% after reports that Chinese conglomerate HNA Group, one of the bank’s largest shareholders, planned to sell its 7.6% stake in the bank.

In Asia, Hong Kong’s Hang Seng was flat and the Shanghai Composite Index rose 0.4%.

Meanwhile, South Korea’s Kospi was down 0.3% and Japan’s Nikkei dropped 0.8%, with the Japanese index set to close lower for the sixth consecutive trading day.

Wall Street’s technology selloff continued in Asian markets Friday, with Samsung falling 2.6%. Shares in Chinese heavyweight Tencent Holdings rose 0.7% but remained down 6.8% on the week.

This past week, “the negativity baton has been passed from EM to U.S. tech,” wrote Deutsche bank strategists in a note Friday.

JJ Kinahan, chief market strategist at TD Ameritrade, attributed part of the U.S. stock declines to the lack of information available to investors between quarterly earnings reports. “Rumors and innuendo drive the markets back and forth” in this period, Mr. Kinahan said.

Trade has been chief among those rumors, with reports suggesting President Trump plans to move forward with proposed tariffs on an additional $200 billion of Chinese goods.

In commodities, U.S. crude slipped 0.8% to $67.24 a barrel, following declines Thursday after a weekly report showed U.S. inventories of petroleum products were already starting to rise as the lower-demand fall season nears.

--Corrie Driebusch contributed to this article.