NEW YORK, July 8 — Wall Street stocks retreated early today following employment data underscoring the strength of the US labour market but also suggesting more Federal Reserve interest rate hikes ahead.
The US economy added 372,000 new positions in June, nearly 100,000 more than economists forecast, and the unemployment rate held steady at 3.6 per cent, the Labour Department reported.
Average hourly earnings rose to cement a 5.1 per cent increase over the past 12 months, the report said.
The wage growth — while significant — currently trails the inflation rate in consumer goods, Briefing.com analyst Patrick O’Hare noted.
“That implies that real earnings growth remains negative, which further implies that there is apt to be pressure on discretionary spending the in coming months,” he said.
But the report “did nothing to deter the market from thinking the Fed is going to remain an aggressive rate-hike path.” About 45 minutes into trading, the Dow Jones Industrial Average was down 0.3 per cent at 31,294.75.
The broad-based S&P 500 shed 0.5 per cent to 3,884.23, while the tech-rich Nasdaq Composite Index dropped 0.5 per cent to 11,559.45.
Among individual companies, Twitter dropped 3.8 per cent following a report from The Washington Post that Elon Musk’s US$44 billion (RM194 billion) deal to buy the social media giant is in danger.
Musk has criticised Twitter’s tally of fake accounts on the microblogging service. While he has already made comments putting his commitment to the deal in doubt, the latest report cited an anonymous source saying his team is preparing for a “change in direction.”
Levi Strauss opened strong, and then eased off, gaining 0.4 per cent as it reported better-than-expected results and raised its dividend by 20 per cent. — AFP