- Decline in US Weekly Jobless Claims; Layoffs jump in March
- Non-farm payroll data due Friday
- AMC jumps as court order impedes stock swap plan
- Indices down: Dow 0.12%, S&P 0.37%, Nasdaq 0.74%
April 6 (Portal) – Wall Street’s main indices fell on Thursday as the latest jobs data pointed to a slowdown in economic growth on the back of rapid rate hikes, with risk-conscious investors looking forward to monthly jobs data for a clearer picture of the economy.
Initial jobless claims fell to a seasonally adjusted 228,000 in the week ended April 1, a Labor Department report showed, but the previous week’s data has been revised to show 48,000 more claims were received.
Economists had expected 200,000 applications for the past week.
Major tech and growth stocks like Apple Inc (AAPL.O), Tesla Inc (TSLA.O) and Nvidia Corp (NVDA.O) fell between 0.9% and 2.1% in early trade, while bond yields edged higher.
The information technology sector (.SPLRCT) was the biggest sectoral loser in the S&P 500 as investors rushed into defensive stocks such as healthcare (.SPXHC) and utilities (.SPLRCU).
A slew of recent reports, including weak personal payroll and job vacancy data earlier this week, pointed to a slowdown in labor demand and raised hopes of a pause in market-punishing Federal Reserve rate hikes.
Unlike the past few months, when investors have hailed signs of a slowing economy in hopes it would allow for a less hawkish Fed, weaker data in recent days has heightened recession fears and weighed on stocks.
“The last strongholds of the economy are beginning to weaken and that signals a recession,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“The labor market is starting to weaken and that basically plays into the hands of the Fed.”
The S&P 500 (.SPX) and the tech-heavy Nasdaq (.IXIC) are heading for weekly declines for the first time in four weeks.
All eyes will now be on the broader report on non-farm payrolls, which are expected to have risen by 239,000 in March, compared to 311,000 new jobs in the previous month.
The report is due on Friday when the US stock market is closed for the Good Friday holiday.
According to CME Group’s Fedwatch tool, Fed fund futures point to a 54.5% chance the Federal Reserve will hold rate hikes in May, with the remainder calling for a 25 basis point rate hike.
A number of large US banks will start the first quarter reporting season for large companies next week.
As of 9:35 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 38.64 points, or 0.12%, to 33,444.08, the S&P 500 (.SPX) was down 14.98 points, or 0.37% 4,075.40 and the Nasdaq Composite (.IXIC) fell 89.02 points, or 0.74%, to 11,907.84.
Among the big stock moves, AMC Entertainment Holdings Inc (AMC.N) rose 8.6% after a U.S. court denied the theater operator’s motion to overturn a status quo order required by its stock conversion plan.
Levi Strauss & Co (LEVI.N) fell 12.7% after the apparel maker posted a decline in quarterly profit.
With a ratio of 1.10 to 1 on the NYSE and a ratio of 1.45 to 1 on the Nasdaq, declining issues outweighed the rising ones.
The S&P index made 5 new 52-week highs and no new lows, while the Nasdaq made 14 new highs and 66 new lows.
Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru; Edited by Anil D’Silva and Arun Koyyur
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