Wall St falls amid renewed rate hike fears

US stock indices have extended losses for a second day as soaring US Treasury yields dragged down growth stocks after stronger-than-expected jobs data amplified fears among investors. investors from higher interest rate increases to control price increases.

The Labor Department report showed nonfarm payrolls rose by 428,000 jobs in April, while economists polled by Reuters expected 391,000 new jobs.

The jobless rate was unchanged at 3.6 percent for the month, while average hourly earnings rose 0.3 percent versus a forecast rise of 0.4 percent.

The data underscored the economy’s strong fundamentals despite a contraction in gross domestic product in the first quarter.

“There are no big surprises in today’s jobs report – it largely confirms that the labor market remains tight, giving the Fed the flexibility to address its price stability mandate head-on,” said Jason Pride, Director Glenmede Private Equity Investments.

“Wage growth was slower and below expectations…but a month is still not trending consistently enough for the Fed to scale back its monetary tightening intentions.”

Nine of the 11 major S&P sectors fell in early trading, with the consumer discretionary sector falling 1.7 percent.

The tech-heavy Nasdaq fell 1.6%, adding to a drop of almost 5.0% in the previous session, as investors feared further rate hikes would be announced as inflation reaches its peak. maximum of four decades.

Traders see a 75 percent chance of a 75 basis point hike at the Fed’s June meeting, despite Fed chief Jerome Powell ruling it out.

Growth shares of Megacap, Google parent Alphabet Inc, Apple Inc, Microsoft Corp, Meta Platforms, Tesla Inc and Amazon.com fell between 0.1% and 1.8%.

The benchmark 10-year Treasury yield rose to 3.131 percent.

Yields and valuations of interest rate-sensitive growth stocks are discounted more when bond yields rise.

The Cboe volatility index, a measure of investor anxiety, rose 3.74 points to 34.94 as all three major averages looked to close their fifth straight weekly decline.

In early trading, the Dow Jones Industrial Average was down 375.98 points, or 1.14 percent, at 32,621.99, the S&P 500 was down 55.62 points, or 1.34 percent, at 4,091.25 , and the Nasdaq Composite fell 192.64 points, or 1.56 percent. cent, to 12,125.06.

The S&P 500 growth index is down 21.7% year-to-date compared to a 6.1% drop in its value counterpart, which houses economically sensitive sectors such as energy, banks and industrials. .

Under Armor Inc plunged 24.3 percent after the sportswear maker forecast negative full-year profit as it grapples with higher transportation costs and the impact on its business of renewed COVID-19 restrictions in China.

Shares of rival Nike Inc fell 5.4 percent.

Down issues outnumbered advances by a ratio of 5.51 to 1 on the New York Stock Exchange.

Downside issues outnumbered advancers by a ratio of 4.73 to 1 on the Nasdaq.

The S&P index posted a new 52-week high and 58 new lows, while the Nasdaq posted 9 new highs and 598 new lows.

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