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US Stocks Lose Ground Monday 12/04 15:53
Wall Street gave back some of its recent gains Monday as stocks finished
lower ahead of some key reports this week on the job market that might provide
more insight into the Federal Reserve's thinking about interest rates.
(AP) -- Wall Street gave back some of its recent gains Monday as stocks
finished lower ahead of some key reports this week on the job market that might
provide more insight into the Federal Reserve's thinking about interest rates.
The S&P 500 closed 0.5% lower. The benchmark index was coming off its best
month in more than a year, and reached its highest level in more than a year on
Friday.
The Dow Jones Industrial Average slipped 0.1%, while the Nasdaq composite
dropped 0.8%.
Treasury yields rose broadly, putting some pressure on stocks. The yield on
the 10-year Treasury, which influences mortgage rates, climbed to 4.25% from
4.21% late Friday.
Technology and communication services companies were the biggest weights on
the market. Microsoft fell 1.4%, Nvidia dropped 2.7%, Meta Platforms slid 1.5%
and Netflix lost 2.5%.
Alaska Air Group slumped 14.2% after announcing it will buy Hawaiian
Airlines for $1 billion in cash plus the assumption of debt. The deal would
test the Biden administration as it fights consolidation in the airline sector.
Spotify surged 7.5% after announcing its third round of layoffs this year.
Uber gained 2.2% after the ride-hailing service was named to join the S&P 500
index.
All told, the S&P 500 fell 24.85 points to 4,569.78. The Dow dropped 41.06
points to 36,204.44, and the Nasdaq gave up 119.54 points to 14,185.49.
Markets ended mixed in Europe and Asia.
U.S. crude oil prices fell 1.4%. Oil prices have been slipping recently,
helping ease pressure on inflation.
Wall Street is coming off a solid week and a strong November on hopes that
inflation is easing enough to allow the Federal Reserve to stop raising
interest rates. Investors are also hoping that the economy remains strong
enough to avoid a recession.
Investors will get several key updates on the economy this week, including
reports on the services sector and the jobs market.
The Institute for Supply Management will release its November report on the
services sector on Tuesday. The sector is a key component in the U.S. economy
and accounts for the majority of the nation's jobs. The report could provide
more insight into consumer spending and the jobs market.
Wall Street will get several reports this week that focus on the broader
employment picture in the U.S. The government will release its October update
on job openings on Tuesday and a weekly report on applications for unemployment
benefits on Thursday.
Investors will be closely watching the government's monthly jobs report for
November, which is on Friday. Analysts polled by FactSet expect U.S. employers
to have added 175,000 jobs last month. They forecast that the unemployment rate
remained steady at 3.9%.
The labor market has remained strong in the U.S. even as the Fed has raised
interest rates sharply in order to fight inflation by slowing the entire
economy. Inflation has been falling since the middle of 2022. The central bank
paused raising rates after its most recent increase in late July.
Wall Street expects rates to remain steady into early 2024, when the Fed
could begin cutting interest rates back from their highest level in two
decades. The Fed's next decision on rates will follow the close of their next
two-day meeting on Dec. 13.
"We're expecting to have a quiet, or at least a consensus outcome, from the
Federal Reserve meeting and therefore the trends that are in place are likely
to have more likelihood to continue," said Bill Northey, senior investment
director at U.S. Bank Wealth Management.
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