US open: Wall Street bucks global trend with early losses
By Iain Gilbert
Date: Friday 07 Dec 2018
(Sharecast News) - US stocks traded lower at the bell on Friday, ignoring a global trend in the wake of a late recovery in the previous session as a result of the latest non-farm payrolls report coming in weaker than expected.
At 1535 GMT, the Dow Jones was down 0.81% at 24,745.94, while the S&P 500 was trading 0.79% lower and the Nasdaq was 1.09% weaker.
On Thursday, equity markets in the US staged a late rebound, with the Dow and S&P closing well off their lows and the Nasdaq Composite ending in the green but on Friday, the Dow failed to gain any traction despite European indices moving ahead with their rebound.
Reports that the Federal Reserve could tighten monetary policy at a slower rate than expected helped offset renewed trade war jitters sparked by the arrest of Huawei's chief financial officer during the previous weekend.
Oanda analyst Craig Erlam said: "Already market expectations of a rate hike this month have moderated a little - now standing at 78% according to Reuters - and I think people are more and more coming around to the idea that the Fed will be much less hawkish in its assessment than it has been."
On the data front, US non-farm payrolls rose less than expected last month, while the unemployment rate held steady, according to data released by the Labor Department on Friday.
Total non-farm payroll employment was up 155,000 in November, missing expectations for a 200,000 jump, while the unemployment rate came in unchanged as expected at 3.7%, its lowest level since 1969 and remaining at that rate for the third month in a row.
The payrolls figure for October was revised down from a previous gain of 250,000 to 237,000, while the figure for September was revised up from a 118,000 increase to a 119,000 jump.
Meanwhile, average hourly earnings were up 3.1% from a year ago, in line with expectations and unchanged from the previous month. The average working week nudged down by 0.1 hours to 34.4 hours.
On the month, average hourly earnings were up 0.2%, missing expectations for 0.3% growth but up from a 0.1% increase in October.
Paul Ashworth, chief US economist at Capital Economics, said the "slightly more modest" gain in payroll employment in November may not go down well in markets given the heightened nervousness in recent months, but this is still a solid gain that suggests economic growth is gradually slowing back towards its potential pace.
In other news, the University of Michigan consumer-sentiment index was unchanged for December at 97.5, holding on to the majority of gains upbeat consumers had ushered in over the last two years.
The last time the sentiment index was consistently above 90 was between 1997 and 2000.
Lastly, wholesale inventories jumped 0.8% in October, as companies increased production ahead of the all-important holiday trading season. However, sales fell 0.2%.
The Commerce Department expected inventories gain 0.7%, as reported last month.
Elsewhere, the ICE US dollar gauge was down 0.1% at 96.709, while the 10-year US treasury yield held on at 2.904%.
On the oil front, West Texas Intermediate was up 4.45% at $53.78 and Brent Crude was 5.21% higher at $63.19.
In corporate news, discount retailer Big Lots slumped 20.19% in early trade after it posted a wider-than-expected loss for the third quarter and downgraded its outlook.
Vail Resorts also lost 12.12% after reporting a wider-than-forecast first-quarter net loss.
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