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US Stocks Wobble Wednesday 02/11 15:27
U.S. stocks felt both the upside and downside Wednesday of a surprisingly
strong report that said the nation's unemployment rate improved last month.
NEW YORK (AP) -- U.S. stocks felt both the upside and downside Wednesday of
a surprisingly strong report that said the nation's unemployment rate improved
last month.
After initially rising toward an all-time high, the S&P 500 flipped between
gains and losses before finishing with a minuscule dip of less than 0.1%. The
Dow Jones Industrial Average dropped 66 points, or 0.1%, and the Nasdaq
composite fell 0.2%. Both also erased early gains.
Treasury yields, meanwhile, remained higher in the bond market after the
Labor Department said U.S. employers added 130,000 jobs to their payrolls last
month, more than economists expected. That helped calm worries from a day
earlier, when a discouraging report suggested spending by U.S. households, the
main engine of the economy, may be stalling.
On one hand, the strong data on jobs raises hopes that the U.S. economy can
remain solid and keep driving big profits for companies. Stocks in the energy
and raw-material industries jumped to some of the bigger gains in the S&P 500,
for example, and their profits tend to be closely tied to the health of the
economy.
Exxon Mobil climbed 2.6%. Smurfit Westrock jumped 9.9% even though the
packaging company reported a weaker profit for the latest quarter than analysts
expected. It gave financial targets for the next five years that some analysts
found encouraging.
But on the other hand for the broad stock market, the stronger-than-expected
jobs data could also keep the Federal Reserve on hold when it comes to cuts to
interest rates. And higher rates can drag on prices for stocks and all kinds of
other investments.
After Wednesday's report showed the tick down for the U.S. unemployment
rate, traders pushed back their bets for when the Fed could begin cutting
interest rates again, according to data from CME Group. The bets slid further
into the summer, after a new Fed chair is set to take the helm.
If Wednesday's jobs report had shown a rise in the unemployment rate or
other worsening for the job market, that could have pushed the Fed to resume
its cuts more quickly.
Lower rates would give the economy and financial markets a boost, though at
the cost of potentially worsening inflation. The next monthly update on
inflation at the U.S. consumer level is arriving on Friday, and it will likely
be another big influence on the Fed's plans.
After the jobs report, the yield on the 10-year Treasury edged up to 4.17%
from 4.16% late Tuesday. The two-year Treasury yield, which moves more closely
with expectations for Fed moves, climbed more. It rose to 3.51% from 3.45%.
To be sure, all is still not perfectly clear for the U.S. economy.
Wednesday's report included major revisions, which said employers added just
181,000 jobs for all of last year. That's less than a third of the previously
reported 584,000, and it's the weakest showing for a year since 2020, when
COVID-19 shut down the economy.
The overall jobs report nevertheless looked to be an encouraging signal for
the economy.
"We all knew there would be downward revisions, but these were better than
expected," Brian Jacobsen, chief economic strategist at Annex Wealth
Management, said of the markdowns for 2025.
On Wall Street, Robinhood Markets fell 8.8% even though the trading and
investment app reported a stronger profit for the latest quarter than analysts
expected. Its revenue fell short of forecasts, and analysts highlighted
Robinhood's forecast for expenses in 2026, along with concerns about how long a
slowdown in crypto trading will last.
Crypto prices have plunged recently, and bitcoin's price fell toward $67,000
Wednesday. It's lost close to half its value since setting a record in October.
Moderna dropped 3.5% after saying the U.S. Food and Drug Administration is
refusing to consider its application for a new flu vaccine made with Nobel
Prize-winning mRNA technology. It's the latest sign of the FDA's heightened
scrutiny of vaccines under Health Secretary Robert F. Kennedy Jr.
Kraft Heinz recovered from an early loss and added 0.4% after CEO Steve
Cahillane said he's pausing the company's planned split into two businesses as
he tries to return it to profitable growth. He also announced a $600 million
investment across marketing, sales and research and development.
All told, the S&P 500 edged down by 0.34 to 6,941.47 points. The Dow Jones
Industrial Average dipped 66.74 to 50,121.40, and the Nasdaq composite fell
36.01 to 23,066.47.
In stock markets abroad, indexes were mixed in Europe following a better
showing in Asia.
The United Kingdom's FTSE 100 gained 1.1%, and South Korea's Kospi rose 1%
for two of the bigger moves.
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