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Job growth beats expectations; unemployment rate steady at
3.7%
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Ford falls on lower November vehicle sales
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Indexes down: Dow 0.21%, S&P 0.45%, Nasdaq 0.70%
(Adds details; updates prices throughout)
Dec 2 (Reuters) - U.S. stock indexes fell on Friday,
with the tech-heavy Nasdaq leading losses, as
higher-than-expected job additions in November reignited
investor concerns about the Federal Reserve continuing on its
path of aggressive monetary policy tightening.
The Labor Department's jobs report showed nonfarm payrolls
rose by 263,000, compared with an estimated 200,000, as U.S.
employers hired more workers than expected in November and
raised wages despite mounting worries of a recession.
The U.S. unemployment rate remained unchanged, as expected.
"Strong job creation and a big increase in wages underscore
the Fed's argument that a lot more work needs to be done to get
inflation under control," said James Knightley, chief
international economist at ING.
"Adding to the Fed's problems, monetary conditions have
loosened in recent weeks as the dollar and longer-dated Treasury
yields have fallen and credit spreads have narrowed. This is
undoing the tightening effects of the Fed's recent rate rises."
Knightley forecast further 50-basis point rate hikes in
December and February, with the potential for tightening needing
to go on for longer, according to him.
The strong jobs report has left investors rethinking the
euphoric rally on Wednesday, sparked by Fed Chair Jerome
Powell's comments on scaling back interest rates hikes as early
as December.
"We continue to think the market is ahead of itself
anticipating Fed easing in late 2023," Mike Schumacher, global
head of macro strategy at Wells Fargo Corporate & Investment
Banking, said.
The rate-setting Federal Open Market Committee meets on Dec.
13-14, capping a volatile year that saw the central bank respond
to the fastest outbreak of inflation since the 1980s, with the
fastest increase in interest rates since then to try to offset
it.
At 12:12 p.m. ET, the Dow Jones Industrial Average
was down 71.82 points, or 0.21%, at 34,323.19, the S&P 500
was down 18.28 points, or 0.45%, at 4,058.29, and the
Nasdaq Composite was down 80.53 points, or 0.70%, at
11,401.92.
Despite Friday's weakness, the S&P 500 and Nasdaq are on
track to end their second straight week higher, while the Dow
looks set for a muted end to the week.
Information technology shares bore the brunt of
selling pressure among the 11 S&P 500 sector indexes, and were
down 1.2%.
Growth and technology companies such as Apple Inc
and Nvidia Corp fell 1.2% and 2.7%, respectively, as
Treasury yields recovered, pressuring rate-sensitive megacap
stocks.
Ford Motor Co slipped 1.3% on lower vehicle sales in
November, while DoorDash Inc lost 2.5% after RBC
downgraded the food delivery firm's stock.
Declining issues outnumbered advancers for a 1.37-to-1 ratio
on the NYSE and a 1.06-to-1 ratio on the Nasdaq.
The S&P index recorded 15 new 52-week highs and no new low,
while the Nasdaq recorded 46 new highs and 72 new lows.
(Reporting by Ankika Biswas, Bansari Mayur Kamdar and Medha
Singh in Bengaluru; Additional reporting by Shubham Batra and
Shashwat Chauhan; Editing by Shounak Dasgupta)