Real-time USA - 10:29 2022-12-02 am EST
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Midday Report: US Equity Indices Decline While Treasury Yields Rise Ahead of Friday's Nonfarm Payrolls

10/06/2022 | 01:14pm
(MT Newswires) -- US benchmark indices fell while government bond yields rose ahead of the nonfarm payrolls report on Friday after weekly jobless claims increased more than forecast.

The Dow Jones Industrial Average fell 0.5% to 30,114.5, with the S&P 500 down 0.5% to 3,765.3 and the Nasdaq Composite 0.2% lower at 11,122.1.

Real estate and utilities were among the steepest decliners, while energy was the biggest gainer after midday Thursday.

The consensus is for an increase in nonfarm payrolls in September of 250,000 compared with 315,000 reported in the previous month, according to data compiled by Trading Economics. The data is due out Friday.

Meanwhile, US initial jobless claims rebounded to 219,000 in the week ended Oct. 1 after falling to 190,000 in the previous week and compared with expectations for an increase to 204,000 in a survey of analysts compiled by Bloomberg. The increase in claims could be the beginning of a slowdown in the US labor market, a note from DA Davidson said Thursday.

Federal Reserve Bank of Atlanta President Raphael Bostic said the tightening monetary policy cycle currently underway "still has some ways to go" while calling on the Federal Open Market Committee members to stay "resolute" at a restrictive level.

The persistently elevated rate of inflation in the US is a direct result of the imbalance in the labor market characterized by more jobs than seekers, which mirrors the mismatch between aggregate demand for and supply of goods and services, Bostic said.

The 10-year yield advanced 4.4 basis points to 3.8%, and the two-year rate jumped 6.8 basis points to 4.22%, trading close to their highest levels in more than a decade and reflecting the 300 basis points increase in interest rates by the Fed in just under seven months.

Federal Reserve Bank of San Francisco President Mary Daly told Bloomberg the US central bank is determined to raise interest rates further to curb inflation and doesn't see rate cuts next year.

The dollar index jumped 1% to 112.23, trading close to its highest level in over two decades.

In company news, Splunk (SPLK) said it filed a lawsuit against Cribl over alleged patent infringement, copyright infringement, unfair competition, and other claims. Separately, UBS downgraded Splunk to neutral from buy while cutting its price target to $86 from $125. Shares of Splunk dropped 5.1% intraday, the worst performer on the Nasdaq.

Costco Wholesale (COST) said net sales were $21.46 billion for the retail month of September, up more than 10% from $19.5 billion a year ago. Shares rose 1.6%, the top performer on the Nasdaq.

International Business Machines (IBM) said it is preparing to invest $20 billion across the Hudson Valley region in New York over the next 10 years in semiconductors, computers, hybrid cloud, artificial intelligence and quantum computers. Shares fell 2.3%, the steepest decliner on the Dow.

West Texas Intermediate futures climbed 0.7% to $88.41 a barrel.

Gold was down 0.2% to $1,717.20 per troy ounce, and silver was up 0.1% to $20.57 per ounce.

MT Newswires 2022
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