Stocks fell Friday on trade worries, signs of a tightening labor market, and disappointing Apple earnings. The US added more jobs than expected in October, and wages rose at the fastest pace in nearly a decade. Follow the US indexes in real time here.
Stocks stumbled Friday as trade optimism faded and as the latest signs of a tightening labor market fanned concerns about rising rates.
The Dow Jones Industrial Average seesawed and closed down 0.45% after White House economic adviser Larry Kudlow and President Donald Trump made a series of contradictory remarks about progress toward a US-China trade deal. The Nasdaq Composite dropped 1.04%, and the S&P 500 also shed 0.65%.
Not helping the mood, Apple shares plummeted nearly 7% after the world’s largest publicly traded company posted weaker than expected guidance for the holiday season. Starbucks posted its strongest sales in more than a year and topped revenue and profit estimates.
All eyes were on the US jobs report before the open, which showed hiring picked up more than expected in October. The Labor Department said the economy added 250,000 jobs last month, compared with forecasts of 188,000, and unemployment remained at a decades-low rate of 3.7%. Wages rose at their fastest pace in nearly a decade, up 3.1% from a year ago.
Ian Sheperdson, chief economist at Pantheon Macroeconomics, said it’s clear the labor market is strong enough to anticipate another rate increase by the Federal Reserve this year. But he added the overshoot could have been partly related to workers returning following Hurricane Florence and Hurricane Michael.
“In one line: Solid across the board, though hard to read the trends behind the weather noise,” he said. “Nothing in this report will make the Fed think that skipping the Dec hike is a good idea.”