S&P 500 breaks 4-day win streak; Dow, Nasdaq mixed in choppy trading

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An indecisive session on Friday ended with a mixed performance from the major U.S. equity averages. Stocks spent time on either side of the unchanged mark, as investors digested the latest reading on employment. Meanwhile, Wall Street looked for direction after the bounce back of the previous couple days, with the S&P 500 breaking a four-day winning streak.

The S&P 500 (SP500) finished -0.1, the Nasdaq (COMP.IND) ended +0.1% and Dow (DJI) closed -0.2%.

The Dow Jones slipped 46.40 points to close at 31,338.15, while the S&P 500 dipped 3.24 points to finish at 3,899.38. The Nasdaq scored a mild advance, its fifth straight day of gains. The index rose 13.96 points to end at 11,635.31.

Looking at sector performance, nine of the 11 S&P market segments recorded losses. However, only Materials had a decline as steep as 1%. All the other declines were fractional. Info Tech and Health Care eked out thin gains.

The major averages fell early in the session amid concerns that the resilient labor market would bolster the Fed’s hawkish stance. But little has changed when it comes to the July FOMC meeting, with a hike of 75 basis points nearly completely priced in.

The latest jobs reading “indicates an overheated labor market that is only beginning to slow,” Goldman economist Jan Hatzius said. “We continue to expect a 75bp hike in the fed funds rate at the July meeting, followed by +50bps in September and +25bps each in November and December.”

The bond market saw an advance in yields. The 10-year yield climbed 8 basis points to 3.09%. The 2-year rose 7 basis points to 3.11%.

Looking at the jobs data, the BLS said the U.S. economy added 372K jobs last month, beating the 270K analysts had expected. The U.S. jobless rate held steady at 3.6%, tying analyst forecasts. Average hourly earnings rose 0.3%, as expected.

“Payroll growth has softened considerably since last summer, but the recent numbers usually would be consistent with a raging economic boom,” Pantheon Macro’s Ian Shepherdson said. “The story today is much more about post-Covid catch-up hiring, but jobs create incomes no matter why they are being created, and solid job and income growth makes a recession very unlikely.”

Shepherdson added: “GDP almost certainly fell in Q2, for the second straight quarter, but job growth averaging 457K per month across the first half, with 375K in Q2. The NBER won’t call a first-half recession.”

Among active stocks, Twitter was a notable decliner after announcing layoffs in its recruitment department.

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