by Lewis Krauskopf, Bansari Mayur Kamdar and Johann M Cherian
(Reuters) – The New York Stock Exchange ended lower on Thursday as ADP’s U.S. employment survey, which showed the labor market remains buoyant, stoked fears that the Reserve federal government (Fed) to continue tightening its monetary policy.
The Dow Jones index fell -1.07%, or 366.38 points, to 33,922.26 points.
The broader S&P-500 lost 35.23 points, or -0.79%, to 4,411.59 points.
The Nasdaq Composite fell for its part by 112.61 points (-0.82%) to 13,679.04 points.
ADP’s monthly survey published on Thursday showed that the private sector in the United States created more jobs than expected in June, a sign of a labor market that remains dynamic despite the continuous rise in interest rates.
This data has reignited fears that the Fed will continue to raise rates in order to control inflation, which remains above its target.
“We don’t see a slowdown in the labor market,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “The Fed doesn’t have to worry about the job market. Considering its mandate, it has no reason not to continue its hikes for a while.”
Among the 11 major sectors of the S&P-500, energy and consumer discretionary posted the largest declines.
Treasury yields jumped on labor market data. The yield on 10-year Treasury bills exceeded 4%, while the two-year one hit its highest level in 16 years.
The Fed did not raise rates at its June meeting, but markets expect it to resume hikes at its next meeting, which will be held at the end of the month.
In stocks, Exxon Mobil fell after announcing that its second-quarter operating profit was expected to fall sharply due to lower natural gas prices and a reduction in oil refining margins.
JetBlue Airways also ended lower after announcing its intention to end its alliance with American Airlines in order to preserve its proposed merger with Spirit Airlines.
(Reporting Lewis Krauskopf in New York, Bansari Mayur Kamdar and Johann M Cherian in Bangalore; Camille Raynaud)
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