MARKETS-STOCKS/USA OPEN-JOBS Wall Street falls at open as jobs report supports September rate hike

Record ID: 144757

  • Title: MARKETS-STOCKS/USA OPEN-JOBS Wall Street falls at open as jobs report supports September rate hike
  • Date: 7th August 2015
  • Summary: NEW YORK CITY, NEW YORK, UNITED STATES (AUGUST 7, 2015) (REUTERS) GAD LEVANON, MANAGING DIRECTOR, ECONOMIC OUTLOOK & LABOR MARKETS, THE CONFERENCE BOARD, SAYING: "I think it was pretty good. Every month now we have more that 200,000 jobs, that's a good development. The labor force is barely growing at all so with 200 (thousand) or even less job growth every month the slack
  • Embargoed: 22nd August 2015 13:00
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  • Topics: General
  • Reuters ID: LVARJYSBBV5K56GCHRFW8ZUFUYU
  • Aspect Ratio: 16:9
  • Story Text: U.S. stocks fell in early trading on Friday (August 7), with the major indexes poised to close in the red for the week, after solid job growth in July pointed to an improving economy, opening the door wider for an interest rate hike in September.
    Wall Street, however, took a dim view of the report as a rate hike will increase borrowing costs for companies. The market has touched record highs, benefiting from near-zero interest rates for the last 10 years.
    Nonfarm payrolls increased 215,000 last month, fewer than the 223,000 forecast by economists, but the unemployment rate held at a seven-year low of 5.3 percent.
    "I think it was pretty good," said Gad Levanon of the Conference Board.
    "We are getting to a tighter and tighter labor market which I think is good for employees and at some point wages will accelerate, they have a better chance of finding a job that they like, so overall it's a good development," he added.
    The Fed has said it will raise rates only when it sees a sustained recovery in the economy. An improving labor market is key to Fed's decision to raise rates.
    Levanon said the jobs report "Makes it more likely that it (interest rate hike) will happen in September."
    "The labor market is rapidly tightening and I think the Fed is reacting to that and will continue to react to it as long as employment is that strong."
    At 9:56 a.m. ET (1356 GMT) the Dow Jones industrial average was down 35.28 points, or 0.2 percent, at 17,384.47, the S&P 500 was down 3.35 points, or 0.16 percent, at 2,080.21 and the Nasdaq composite was down 8.08 points, or 0.16 percent, at 5,048.36.
    Six of the 10 major S&P sectors were lower with the health index's 0.51 percent fall leading the decliners. The Nasdaq biotechnology index fell to a one-month low.
    Wall Street ended sharply lower on Thursday as weak earnings reports from media companies stirred fears that more viewers are ditching cable TV, dragging the sector to its worst two-day loss since the financial crisis.
    Earnings continue to remain in focus. With about three-quarters of the S&P 500 companies having reported, second-quarter earnings are estimated to have increased 1.6 percent while revenues are projected to have fallen 3.4 percent, according to Thomson Reuters data.
    Nvidia's shares rose 9.6 percent to $22.41 (USD), a day after the chipmaker reported a surprise rise in second-quarter revenue.
    Groupon fell 3.7 percent to $4.51 after the company's quarterly results missed expectations.
    Noodles slumped 20 percent to $12.17 after the pasta and sandwich restaurant chain forecast full-year adjusted profit and revenue below analysts' estimates.
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