WALL Street stocks tumbled on Friday (Aug 2) following a disappointing US jobs report that raised recession worries while also boosting the odds of interest rate cuts by the Fed.
The US economy added 114,000 jobs last month, a drop from the prior month and fewer than expected, while the jobless rate rose to 4.3 per cent, the highest level since October 2021.
The report added to recession fears following lacklustre manufacturing data on Thursday, with losses in the week’s final two days leaving all three major indices down for the week.
The Dow Jones Industrial Average finished at 39,737.26, down 1.5 per cent for the day and 2.1 per cent for the week.
The broad-based S&P 500 fell 1.8 per cent to 5,346.56, while the tech-rich Nasdaq Composite Index dropped 2.4 per cent to 16,776.16.
“Historically it’s very difficult to achieve a soft landing,” said Steve Sosnick of Interactive Brokers. “It’s easy for a soft landing to sneak up on you and become a hard landing. And that’s what the market is very much afraid of right now.”
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But Art Hogan of B Riley Wealth said the market is likely overreacting to a few weak data points, noting that most of the corporate earnings released in the last few weeks have been solid.
“Investors are ready to shoot first and ask questions later,” Hogan said.
Among individual companies, Intel shares sank more than 26 per cent after the US chip maker announced it would cut more than 15 per cent of its workforce while reporting a US$1.6 billion quarterly loss.
Amazon also had a bad day, losing nearly nine per cent on worries about the tech giant’s profit outlook after revenues fell short of expectations.
But Apple advanced 0.7 per cent after reporting quarterly profit of US$21.4 billion, besting analyst forecasts.
Coca-Cola rose 2.0 per cent as it announced plans to pay a tax penalty worth US$6 billion while it pursues an appeal in a long-running dispute with the Internal Revenue Service.
The soft drinks giant had previously said the dispute could potentially involve a liability of US$16 billion. AFP
