US close: Stocks end on mixed note as markets digest September jobs report

By Sharecast News

Sharecast News | 08 Oct, 2017

Updated : 16:51

Wall Street finished on a slightly mixed note but off its session lows following the release of data showing an unexpected sharp drop in the country's jobless rate to its lowest since January 2001 and amid some reports of potential new missile tests by North Korea.

At the closing bell, the Dow Jones Industrial Average was lower by 0.01% or 1.72 points to 22,773.67, alongside a dip of 0.11% or 2.74 points on the S&P 500 to 2,549.33 while the Nasdaq Composite was up 0.07% or 4.82 points at 6,590.18.

In parallel, the yield on the benchmark 10-year US Treasury note was higher by one basis points at 2.36% - after hitting an intraday high of 2.40% - with Fed funds futures left pricing in 90.1% odds of a 25 basis point rate hike by the central bank at its December meeting.

To take note of, although the analyst consensus was projecting a slowdown in S&P 500 constituents earnings to 3.6% in the third quarter, after growth of 11% over the prior three-month stretch, growth was seen re-accelerating over the next three quarters, according to Bloomberg data.

In economic news, although non-farm payrolls in the US shrank unexpectedly in September, dropping by 33,000, the first negative reading for seven years, unemployment fell from 4.4% to 4.2% - the lowest reading since January 2001.

Furthermore, wage growth accelerated to a 0.5% month-on-month clip (consensus: 0.3%), the Department of Labor said.

"Overall, this was a mixed report [...] We maintain our forecast that the FOMC will increase interest rates one more time this year in December, but we think that the Fed’s reaction function will be data dependent and the inflation and employment reports of the coming months will play a significant role in its decision," said Blerina Uruci and Pooja Sriram at Barclays Research.

Aside from the data, investors were also scanning for remarks from various Fed speakers, including the head of the Federal Reserve bank of New York, William Dudley, who voiced supported for a continued withdrawal of policy accommodation.

In Dudley's case, on Friday morning he said: "Even though inflation is currently somewhat below our longer-run objective, I judge that it is still appropriate to continue to remove monetary policy accommodation gradually."

On the corporate front, Costco Wholesale was a big faller even after it posted better-than-expected quarterly profits and earnings.

From a sector standpoint, the best performance was seen in stocks within the following industrial groups: Automobiles (1.09%), Airlines (0.87%) and Restaurants (0.78%).

Netflix also rose after announcing it was raising the price of its two-screen high definition subscription from $9.99 to $10.99 and that for being able to watch on four screens and in ultra-high definition from $11.99 to $13.99.

For its part, Kellogg said it would acquire Rxbar for $600m

Elsewhere, Yum Brands spin-off Yum China Holdings was also in focus after announcing its first dividend and an increased share buyback plan.

Stock in data operator Switch jumped 22.6% in its market debut.

Dow Jones - Risers

Travelers Company Inc. (TRV) $125.07 0.51%
McDonald's Corp. (MCD) $159.60 0.50%
Cisco Systems Inc. (CSCO) $33.75 0.48%
Visa Inc. (V) $106.73 0.46%
Nike Inc. (NKE) $52.42 0.46%
American Express Co. (AXP) $91.51 0.43%
Caterpillar Inc. (CAT) $126.94 0.42%
Procter & Gamble Co. (PG) $92.31 0.33%
Intel Corp. (INTC) $39.63 0.25%
Pfizer Inc. (PFE) $36.05 0.14%