Dow Jones Industrial Average Opens Lower Despite Solid March Jobs Data
The Dow Jones Industrial Average (DJIA) opened lower on Friday following another drop in oil prices, brushing aside a strong March jobs report.
As of 9:36 a.m. in New York, the Dow Jones index fell 0.6% to 17,573.33. Twenty stocks were declining and 10 issues were advancing.
The S&P 500 was down 0.7% at 2,045.66, while the tech heavy NASDAQ Composite slipped 0.6% to 4,840.78.
Oil prices plunged on Friday after reports that Saudi Arabia might not curb its production unless other major producers join the efforts to stem the global oversupply. West Texas Intermediate futures were trading down 2.5% at $37.36 a barrel on the New York Mercantile Exchange.
Nonfarm payrolls increased by 215,000 in March, the Labor Department said on Friday, above expectations.
Economists polled by MarketWatch had forecast a 203,000 increase in new nonfarm jobs, while economists surveyed by the Wall Street Journal had forecast an increase of 213,000 jobs.
The steady pace of hiring may reassure the Federal Reserve that the world’s largest economy remains on sound footing, paving the way for another hike in interest rates as early as June. Yet the report is not strong enough, particularly following Fed Chairwoman Janet Yellen’s comments on Thursday that the U.S. central bank will carefully approach the path of interest-rate hikes.
The unemployment rate slightly rose to five percent from 4.9%, but that was because more Americans joined the labor force, the Labor Department said on Friday.
Worker pay recovered in March after a small decline in February. Wages rose 0.3% in March to $25.43 an hour.
The strong U.S. jobs report strengthened the U.S. dollar, short-dated U.S. treasuries, but dumped gold and other precious metals.
The U.S. Dollar Index, which tracks the greenback against a basket of six currencies, rose to 94.70 from 94.40.
The yield on a 2-year Treasury note, which is more sensitive to rate increases, was up 3 basis points to 0.752%.
Gold for June delivery gave up 1.6% to 1,216, whereas silver decreased 3.3% to $14.95.
Stocks worldwide retreated in the beginning of a new quarter on Friday. The Stoxx Europe 600 decreased 2.2% in afternoon trade, following a downbeat session in Asia.
Sentiment was smashed after a Bank of Japan survey published on Friday indicated that business confidence dropped to its lowest in three years, was expected to worsen in the coming quarter. Japan’s Nikkei Stock Average closed 3.6% lower, its sharpest slide in a month.
BlackBerry Ltd (NASDAQ:BBRY) declined as much as 9% to $7.36. The Canadian company reported sales retreated in its latest quarter amid an uncertain outlook for its smartphone business.
Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT) surrendered as much as 5.7% to $78.70 after China’s Anbang dropped its $14 billion takeover offer for Starwood, leaving the Connecticut-based company free to go ahead with its planned merger with hotel operator Marriott International Inc (NASDAQ:MAR).
Tesla Motors Inc (NASDAQ:TSLA) jumped as much as 7.9% after the electric car maker unveiled its new Model 3, which it plans to begin producing next year at a list price of $35,000.
The Dow Jones index closed 0.2% lower on Thursday, snapping a four-day rally, but ending a turbulent first quarter with a 1.5% gain.