Stocks Come Under Pressure Following Mixed Jobs Data - U.S. Commentary

(RTTNews) - Stocks have moved mostly lower in early trading on Friday, giving back some ground after ending the two previous sessions sharply higher. The major averages have slid into negative territory after opening the day roughly flat.

In recent trading, the major averages have accelerated to the downside, hitting new lows for the young session. The Dow is down 146.13 points or 0.8 percent at 17,761.74, the Nasdaq is down 28.49 points or 0.6 percent at 4,707.69 and the S&P 500 is down 15.62 points or 0.8 percent at 2,046.52.

The early weakness that has emerged on Wall Street comes following the release of the Labor Department's closely watched monthly jobs report.

While a bigger than expected increase in employment contributed to a drop in the unemployment rate, the report also showed a slowdown in wage growth.

The Labor Department said non-farm payroll employment climbed by 252,000 jobs in December compared to economist estimates for an increase of about 245,000 jobs.

The stronger than expected job growth helped to push the unemployment rate down to a new six-year low of 5.6 percent.

However, the report also said the annual rate of average hourly earnings growth slowed to 1.7 percent in December, the slowest rate of growth since October of 2012.

The mixed data has led to some uncertainty about the outlook for monetary policy, leading some traders to cash in on the recent gains.

Rob Carnell, chief international economist at ING, said, "If you want to raise rates, these numbers provide the ammunition you need in terms of payrolls and the unemployment rate. Historically, the Fed always thought full employment was at about a 5.3% rate."

"Against this, with even less wage inflation than was apparent last month, the doves can argue that the unemployment figures are biased and giving a misleading steer and argue against any near-term increase in rates," he added.

Negative sentiment has also been generated by a modest pullback by the price of crude oil, with crude for February delivery sliding $0.32 to $48.47 a barrel.

The drop in prices is contributing to considerable weakness among oil service stocks, as reflected by the 1.7 percent loss being posted by the Philadelphia Oil Service Index.

Financial, steel and retail stocks are also under pressure in early trading, while gold stocks are showing a substantial move to the upside.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.8 percent, the German DAX Index is down by 1 percent and the French CAC 40 Index is down by 1.3 percent.

In the bond market, treasuries have moved modestly higher amid the pullback on Wall Street. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.4 basis points at 2.002 percent.