NEW YORK, Jan 19 (Reuters) – U.S. stocks closed lower on Thursday after labor market data fueled concerns that the Federal Reserve will continue to raise interest rates, which could cause the economy to collapse.
A report from the Labor Department showed that weekly jobless claims were lower than expected, indicating that the labor market remained strong despite the Fed’s efforts to curb demand for workers.
Expectations that the central bank will increase interest rates again at its policy announcement next month were not changed by the report.
Investors have been looking for signs of weakness in the labor market as an important factor for the Fed to start reducing its policy tightening.
Some data showed that manufacturing jobs in the mid-Atlantic region were also subdued in January, as data from the Commerce Department confirmed the slowdown in the housing market continued.
“What we’re seeing is that the market is going down with uncertainty so the news is not going well and what we’re seeing today is a continuation,” said Brad McMillan, chief economist at Commonwealth Financial Network. , an independent retailer in Waltham, Massachusetts.
“The fact that we don’t see a lot says there’s a lot of bad news.”
The Dow Jones Industrial Average (.DJI) fell 252.4 points, or 0.76%, to 33,044.56, the S&P 500 (.SPX) lost 30.01 points, or 0.76%, to 3,898.85 and the Nasdaq Composite (.IX) dropped 4 points (. IX04). 0.96%, up to 10,852.27.
Recent comments from Fed officials continue to show a disconnect between the central bank’s view of its rate hike and market expectations.
Boston Fed President Susan Collins echoed the comments of other policymakers to support the case for interest rates to rise above 5%.
But stocks ended their losses after Fed vice chairman Lael Brainard said the Fed still wanted to “explore” the level of interest rate hikes that would be necessary to control inflation.
Markets, however, are seeing an increase of 4.89% through June and were more expensive than the 25 rates from the US central bank in February, reducing rates at the end of the year. .
Both the S&P 500 and the Dow fell for the third straight quarter, their longest streak of declines in a month.
In the earnings lead, Procter & Gamble Co ( PG.N ) fell 2.11% after warning of commodity prices weighing on profits, although it raised its full-year guidance.
Analysts now expect annual earnings from S&P 500 companies to fall 2.8% in the fourth quarter, according to Refinitiv data, compared with a 1.6% decline earlier in the year.
Netflix Inc (NFLX.O) closed 3.23% lower ahead of its results scheduled to be released after the closing bell on Thursday. But the stock rebounded to gain 3.33% after posting quarterly earnings and the departure of co-founder Reed Hastings as chief executive to executive chairman.
Declining issues outnumbered advancing ones on the NYSE by a 1.49-to-1 ratio; on the Nasdaq, the ratio is 1.70-to-1 in favor of the bearers.
S&P 500 set 1 new 52-week high and 3 new lows; The Nasdaq Composite recorded 46 new highs and 33 new lows.
Chuck Mikolajczak reports, writing by Deepa Babington
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