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Stocks fall on hotter-than-anticipated November jobs report, Dow slides nearly 200 points

Wall Street points toward modest losses at open as investors await jobs report

Stocks slid Friday as investors digested hotter-than-anticipated jobs data, which worried investors looking for signals that the Federal Reserve can begin slowing interest rate hikes.

The Dow Jones Industrial Average dropped 187 points, or 0.5%. The S&P 500 lost 0.8% as all 11 sectors traded down, led by information technology’s 1.4% drop. The Nasdaq Composite shed 1%.

The S&P 500 and the Nasdaq are on track for modest weekly gains, while the Dow is on pace for a minor loss.

Nonfarm payrolls increased 263,000 in November, a bigger gain than the 200,000 increase expected by economists polled by Dow Jones. The unemployment rate held steady at 3.7%.

Treasury yields jumped while stocks slid as investors digested the data, which was closely watched, with labor considered a relatively stubborn area of the economy. Investors were hoping for a number that was both low enough to signal the labor market was cooling in response to prior interest rate hikes and strong enough to indicate the U.S. could avoid a recession.

“The supply of workers remain low, the demand for workers remains high,” said Michael Arone, chief investment strategist at State Street Global Advisors. “That means wage inflation will remain sticky, and that’s a problem for stocks going forward because it’s likely to keep the Fed hawkish rather than dovish.”

This is the final monthly employment report before the Fed’s two-day meeting Dec. 13-14, in which the central bank is expected to raise its fed funds target rate by a half percentage point. A 50 basis point increase would mark a slowing from the prior 75 basis point rate hikes set by the central bank.

Fed Chair Jerome Powell appeared to confirm slowing rate hikes on the horizon in a speech Wednesday, noting that a pullback could start as early as December.

Stocks rallied in response to Powell’s remarks Wednesday, with the Dow ending up more than 700 points. But the Dow closed lower by nearly 195 points Thursday as traders looked to reduce exposure before the jobs data came out. The S&P 500 inched down 0.09% on Thursday, while the tech-heavy Nasdaq Composite gained 0.13%.

Read More:Stocks fall on hotter-than-anticipated November jobs report, Dow slides nearly 200 points