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US STOCKS-Wall St jumps as December jobs report eases rate worries

Reuters · 01/06/2023 10:51
US STOCKS-Wall St jumps as December jobs report eases rate worries

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U.S. December payrolls up 223,000 vs est 200,000

Tesla falls after cutting prices in China

Indexes up: Dow 1.11%, S&P 0.92%, Nasdaq 0.62%

Adds comments, details; updates prices throughout

By Shubham Batra and Ankika Biswas

- Wall Street's main indexes rallied on Friday as a slew of economic data including cooling wages and moderation in U.S. jobs growth in December calmed worries over the Federal Reserve's rate-hike trajectory.

The payrolls rose by 223,000 jobs in December, data from the Labor Department showed, while a 0.3% rise in average earnings was smaller than expected and lower than the previous month.

The for November were revised to show payrolls rose by 256,000 and average earnings grew by 0.4%.

"Fed will look at these and say the labor market is still pretty robust," said Richard Flax, chief investment officer at Moneyfarm.

"Maybe if you wanted to be very optimistic, you would say that a slowdown in the growth of average hourly earnings is a positive thing, but it's a single data point."

Another set of data showed U.S. services activity contracted for the first time in more than 2-1/2 years in December amid weakening demand, with more signs of inflation abating.

Big technology and other growth stocks such as Microsoft Corp MSFT.O, Apple Inc AAPL.O and Meta Platforms Inc META.O rose between 0.5% and 2.0%, helped by a decline in the 10-year U.S. Treasury yield. US10YT=RR

Tesla Inc TSLA.O dropped 4.2% after the company cut electric-car prices in China for the second time in less than three months.

Except healthcare stocks .SPXHC, all the major S&P 500 indexes were in the green led by gains in energy shares .SPNY.

A resilient labor market has powered the economy through consumer spending, but could prompt the Fed to lift its target interest rate above the 5.1% peak it had projected last month and keep it there for a while.

Earlier this week, minutes from the Fed's December meeting showed that the central bank was laser-focused on fighting inflation even as officials agreed to slow the pace of rate hikes to limit risks to economic growth.

Money market bets of a 25-basis point hike in the February policy meeting shot up to 73% and the terminal rate was seen edging below 5% by June. FEDWATCH

Investors will also focus on comments from a slew of Fed officials scheduled to speak later on Friday.

At 10:28 a.m. ET, the Dow Jones Industrial Average .DJI was up 363.92 points, or 1.11%, at 33,294.00, the S&P 500 .SPX was up 34.88 points, or 0.92%, at 3,842.98, and the Nasdaq Composite .IXIC was up 63.53 points, or 0.62%, at 10,368.77.

Bed Bath & Beyond Inc BBBY.O slid 15.7% after Reuters reported that the home goods retailer was preparing to seek bankruptcy protection in coming weeks.

Advancing issues outnumbered decliners for a 4.77-to-1 ratio on the NYSE and a 1.70-to-1 ratio on the Nasdaq.

The S&P index recorded 13 52-week highs and five lows, while the Nasdaq recorded 45 highs and 52 lows.

(Reporting by Shubham Batra, Ankika Biswas and Shashwat Chauhan in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta)