Stock Market Today: Dow Wavers on Jobs Report, Virgin Galactic Tumbles

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The pace of monetary policy tightening by the Federal Reserve remains a major concern for markets.

Saul Loeb/AFP via Getty Images

Stocks were mixed on Friday as market participants digested a stronger-than-expected July jobs report.

In the afternoon discussions, the


Dow Jones Industrial Average

reversed earlier declines to rise 17 points, or less than 0.1%. The


S&P500

fell by 0.3%, and the


Nasdaq Compound

fell by 0.5%. All three indexes were off their worst levels for the day.

The United States added 528,000 jobs in July, more than doubling expectations of 258,000, while the unemployment rate fell to 3.5%, better than estimates of 3.6%.

Following the jobs data, the 2-year Treasury yield jumped 17 basis points on Friday, to 3.23%, while the 10-year yield rose 16 basis points to 2.86%. The


US dollar index

(DXY), which measures the strength of the greenback against a basket of currencies, was also up on Friday, rising 0.9% to $106.67.

“We’re going to get a few different data points between now and the next Fed rate decision, so nobody wants to make any ill-considered moves when we get a printout of July inflation next week and then other data all throughout the month,” said Tavis McCourt, strategist at Raymond James.

The concern for the stock market is that the Federal Reserve will step up its monetary policy tightening as a weaker labor market is needed to try to rein in runaway inflation. The market is now pricing in a 70.5% chance of a 75 basis point rate hike in September, up from 34% on Thursday, according to CME Group.

The Fed has already raised rates four times this year, including two 75 basis point rate hikes in June and July – the largest since 1994 – and is expected to continue raising rates this year before slowing in 2023. risk is that the demand economy, while it should control inflation, could cause a recession.

But Friday’s jobs numbers could contradict the debate that the United States is in a recession, which has been going on since the U.S. economy contracted for the second consecutive quarter. Cliff Hodge, chief investment officer at Cornerstone Wealth, spoke out against the possibility of a recession for now and said Friday that “we don’t add 528,000 jobs in a month when we’re in a recession. That’s the good news.

Jan Szilagyi, CEO and co-founder of AI research firm Toggle, wrote on Friday that “for the Fed, this means maintaining a very hawkish stance and cannot let go of the 75 basis point pace – in fact , a discussion on 100 basis point will probably be reopened.

Now the focus will be on next week’s consumer price index, which will show how much inflation has slowed or picked up in July. Economists polled by FactSet expect consumer prices to have risen 8.7% over the past 12 months, down from the 40-year high of 9.1% recorded in June . If inflation rises more than expected, it could mean even more bad news for equities.

Timothy

Chubb
,

chief investment officer at Girard, said on Friday that there was a general theme with economic data beating expectations recently, such as the jobs report and earlier inflation data, and he does not expect expect next week’s CPI report to be different.

“If we see a really hot number, the market will definitely be safe from risk. Maybe we see a bit more tightening and rate increases trickle down to the market, so I think there is some short-term risk,” Chubb said.

Here are some stocks in motion on Friday:

Cloudy

(ticker: NET) jumped 27% after the web security provider raised its full-year revenue forecast. The company detailed expected full-year revenue of $968 million to $972 million, above its previous projections of $955 million to $959 million and topping analyst consensus estimates of $958.4 million.

Galactic Virgo

Holdings (SPCE) fell 15% after the space tourism group pushed back the launch date of its commercial service to the second quarter of 2023, having already pushed the date back to the last quarter of 2022.

DraftKings

The stock soared 12% after the online sports betting platform raised its financial guidance and reported a lower loss and higher revenue than Wall Street expected for its second quarter.

i robot

(IRBT) climbed 19% after Amazon announced it was buying the smart vacuum cleaner company.

carvana

(CVNA) climbed 33% after the online used-car retailer reported sales volume of 117,564 in the second quarter, compared with 105,185 in the previous quarter.

Global Blood Therapeutics

(GBT) rose 28% following a report that Pfizer is in late-stage negotiations to buy the drugmaker.

Write to Jack Denton at [email protected] and Angela Palumbo at [email protected]

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