(Adds comments, changes byline, updates prices)
* Nonfarm payrolls increase 428,000 in April
* Under Armour tumbles on dismal 2023 profit outlook
* Coinbase dropped to lowest level since market debut
* Indexes down: S&P 0.9%, Dow 500 0.7%, Nasdaq 1.3%
May 6 (Reuters) – U.S. stock indexes fell on Friday as
investors worried over soaring Treasury yields and the prospect
of more Fed rate hikes.
“The solid jobs number today confirms the economy is on
solid footing. Earnings have been strong, the employment
backdrop is strong. There will likely not be a recession this
year, which is a good thing,” said Ryan Detrick, chief market
strategist for LPL Financial.
“But the uncertainty over a 40-year-high inflation and …
a hawkish Fed are still what investors are faced with the
remainder this year.”
The Labor Department’s report showed nonfarm payrolls
increased by 428,000 jobs in April, versus expectations of
391,000 job additions, underscoring the economy’s strong
fundamentals despite a contraction in gross domestic product in
the first quarter.
The unemployment rate remained unchanged at 3.6% in the
month, while average hourly earnings increased 0.3% against
forecast of a 0.4% rise.
Ten of the 11 major S&P sectors declined, with energy
outperforming with a 1.5% gain as oil prices climbed on
supply concerns.
“Oil is up again, continuing the inflationary worries that
we are seeing and energy is bucking the trend of a very weak
market. But the higher natural gas and crude oil prices have
been tailwinds for the energy sector this year.” Detrick added
Megacap growth stocks slipped, with a few exceptions
including Apple Inc, which rose 0.7%. JP Morgan
Chase slid 1% to lead losses among big banks.
The yield on the benchmark 10-year Treasury notes
rose to 3.131% earlier in the session.
Most traders are expecting a 75 basis-point hike at the U.S.
central bank’s June meeting, despite Fed chief Jerome Powell’s
ruling that out.
The CBOE volatility index, a measure of investors’
anxiety, spiked to 31.41 points and the three major U.S.
averages looked likely to register their fifth straight weekly
decline, although with smaller losses than the prior week.
At 2:01 p.m. ET, the Dow Jones Industrial Average
fell 245.43 points, or 0.74%, to 32,752.54, the S&P 500
lost 34.12 points, or 0.82%, to 4,112.75.
The tech-heavy Nasdaq slipped 1.4% in choppy trading, adding
to a near 5% drop in the previous session.
Under Armour Inc slumped 24.5% after the sportswear
maker forecast downbeat fiscal 2023 profit. Shares of rival Nike
Inc slipped 4.8%.
Coinbase Global Inc dropped 10% on Friday to the
lowest level since the cryptocurrency exchange’s 2021 stock
market debut.
Declining issues outnumbered advancing ones on the NYSE by a
2.71-to-1 ratio; on Nasdaq, a 3.12-to-1 ratio favored decliners.
The S&P 500 posted one new 52-week high and 61 new lows; the
Nasdaq Composite recorded 13 new highs and 717 new lows.
(Reporting by Echo Wang in New York; Additional reporting by
Devik Jain in Bengaluru; Editing by Shinjini Ganguli, Anil
D’Silva and Cynthia Osterman)
