Stocks slump in early trading after weak jobs report
NEW YORK -- Stocks slumped in early trading Friday as investors weighed what August’s unemployment report could mean for continued Federal Reserve stimulus.
The Dow Jones industrial average fell 109.25 points, or 0.73%, to 14,828.23 shortly after the opening bell.
The broader Standard & Poor’s 500 shed 8.71 points, or 0.53%, to 1,646.37. The technology-focused Nasdaq composite index lost 25.09 points, or 0.69%, to 3,633.69.
QUIZ: How much do you know about the stock market?
The federal government Friday morning issued a lackluster report on the nation’s labor market in August. The U.S. economy added 169,000 net new jobs in August, fewer than the 177,000 analysts had expected, and the Labor Department revised significantly downward earlier months’ job gains.
The Labor Department said the unemployment rate ticked lower to 7.3%, from 7.4% in July.
The Fed has signaled that it could begin scaling back its extraordinary monetary stimulus program as early as this month, depending on how data portray the economy’s health.
When the Fed will “taper” its so-called quantitative easing program has been the obsession of investors for months. By buying bonds, the Fed has pushed down interest rates and made riskier investments like stocks more attractive, helping to fuel this year’s stock rally.
Despite the less-the-stellar jobs report, some analysts predict the Fed will nonetheless start to wean the economy off of its easy-money policies starting this month.
Douglas Coté, chief market strategist for ING U.S. Investment Management, said in a note that he was skeptical the Labor Department report would mean a delayed Fed taper.
“I don’t buy it,” he wrote. “The September taper will begin on the [Fed] meeting on September 18th is my forecast. We are on the path to normal, expect volatility.”
ALSO:
Antonio Villaraigosa joins Herbalife as advisor
Mortgage rates rise, but jumbo loans are cheap
