Share

Wall St set to open lower after jobs data

Washington - Wall Street was set to open lower on Friday as investors assessed August jobs data, which showed that fewer than expected jobs were added to the economy even as unemployment rate dropped to its lowest in more than seven years.

Nonfarm payrolls increased 173 000 last month after an upwardly revised 245 000 rise in July and below the 220 000 that economists polled by Reuters had expected. Unemployment rate dropped to 5.1% and wages accelerated.

The report underscored the US economy's vibrancy in the face of volatile global financial markets and China's slowing growth, and kept alive the prospect of the U.S. Federal Reserve raising rates at its September 16 to September 17 meeting.

S&P 500 e-minis were down 32.75 points with 428 567 contracts traded. Nasdaq 100 e-minis were down 68.75 points, on volume of 67 094 contracts. Dow e-minis were down 283 points with 50 987 contracts changing hands.

"The unemployment rate has fallen while wages have accelerated - that will certainly give the hawks more ammunition for a September rate hike," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

The August jobs data, however, has often been sharply revised upward after initial weak readings due to seasonal fluctuations.

The recent turmoil in the market has prompted some investors to bet the Fed might wait until the end of the year to hike rates.

But Fed vice-chairperson Stanley Fischer said last Friday it was still too early to decide if the volatility, which left the S&P 500 with its biggest monthly drop in three years in August, had made a September hike unfeasible.

The Fed has said it will increase rates only if it sees sustained economic recovery. While the labor market continues to gain strength, inflation stubbornly remains below the 2% target set by the central bank.

Separately, Richmond Fed president Jeffrey Lacker said he had seen enough healing in the US labour market to warrant raising interest rates soon.

US stocks mostly ended higher on Thursday in choppy trading as investors remained on edge ahead of the data.

Near-zero rates have allowed the US stock market to stage a spectacular bull-run since the financial crisis. Higher interest rates increase the cost of borrowing and impact the profit margins of companies.

Caterpillar's shares were down 2.3% at 74.38 premarket after Baird downgraded the stock to "neutral".

Netflix was down 3% at $98. The stock has fallen for the past five days.

Verifone Systems was down 4.4% at $29.70 after the payment device maker's current-quarter forecast disappointed expectations.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.99
-0.2%
Rand - Pound
24.09
+0.1%
Rand - Euro
20.60
-0.0%
Rand - Aus dollar
12.37
+0.4%
Rand - Yen
0.13
+0.5%
Platinum
904.45
+0.2%
Palladium
999.75
-0.6%
Gold
2,152.91
-0.4%
Silver
24.91
-0.5%
Brent Crude
86.89
+1.8%
Top 40
65,985
-0.4%
All Share
72,185
-0.3%
Resource 10
53,353
+0.1%
Industrial 25
99,500
-1.0%
Financial 15
16,667
+0.3%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders