Wall Street drops on paltry jobs growth, global slowdown worries
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(Reuters) – Wall Street’s main indexes fell on Friday, after data showed U.S. job growth almost stalled in February, adding to concerns of a slowdown in global growth sparked by weak China export data and a prolonged slowdown in the eurozone.
The U.S. economy added just 20,000 jobs in February, compared with expectations of non farm payrolls rising by 180,000 jobs. However, the unemployment rate fell below 4 percent and annual wage growth was the best since 2009.
“I wouldn’t say that the jobs report is pointing to a slowdown in the United States, perhaps it is moderating,” said Mike Loewengart, vice-president of investment strategy at E*Trade Financial in New York.
“But we can’t ignore the fact that we’re seeing growth slow on a global basis and our economy itself could be moderating.”
Big U.S. banks pared their losses, with Bank of America Corp, JPMorgan Chase & Co, Morgan Stanley, Citigroup Inc now trading between flat and down 0.4 percent.
Worries about global growth intensified after exports in China, the world’s second largest economy, tumbled the most in three years in February, which stirred talk of a “trade recession”.
The dismal economic report follows decision by the European Central Bank to cut its growth forecasts and unveil a new round of stimulus.
Democratic Senator Elizabeth Warren said if elected president she would seek to break up tech giants Amazon.com Inc, Alphabet Inc’s Google and Facebook Inc.
The technology sector fell 0.42 percent and was the biggest weight on the S&P 500, while Facebook, Amazon, Apple Inc, Netflix Inc dropped between 0.2 percent and 1.3 percent.
The three main indexes were on pace for their steepest weekly fall since December after starting the year on a strong note.
At 11:23 a.m. ET the Dow Jones Industrial Average was down 118.98 points, or 0.47 percent, at 25,354.25, the S&P 500 was down 17.14 points, or 0.62 percent, at 2,731.79 and the Nasdaq Composite was down 36.12 points, or 0.49 percent, at 7,385.35.
The energy sector tumbled 2.43 percent as oil prices dropped about 3 percent and Norway’s trillion-dollar sovereign wealth fund said it would drop oil and gas companies from its benchmark index and investment universe.
Oil majors ExxonMobil Corp and Chevron Corp dropped about 1.5 percent each.
In corporate news, Costco Wholesale Corp jumped 5.1 percent, the most on the S&P, after the warehouse club operator’s quarterly profit trumped estimates as margin pressures eased.
Declining issues outnumbered advancers for a 2.17-to-1 ratio on the NYSE and for a 1.46-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and five new lows, while the Nasdaq recorded 21 new highs and 42 new lows.
Reporting by Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur