U.S. Stocks Decline (DJ -279) as Payrolls Report Fuels Rate Speculation
Source: Yahoo (Bloomberg)
U.S. stocks fell, with the Standard & Poor’s 500 Index heading for a second straight weekly loss, as better-than-forecast jobs data fueled speculation the Federal Reserve is moving closer to raising interest rates.
“Investors are looking and focusing entirely on what the Federal Reserve will do in the coming months,” Chad Morganlander, a money manager at St. Louis-based Stifel, Nicolaus & Co., which oversees about $170 billion, said by telephone. “Effectively good news in this data point supports the notion that they will raise rates in the not-too-distant future. That scotches the speculative fervor within the equity market.”
Employers added more jobs than forecast in February and the unemployment rate dropped to 5.5 percent, the lowest in almost seven years, showing the labor market is sustaining progress after the best annual performance in 15 years.
The 295,000 advance in payrolls last month followed a 239,000 January increase that was smaller than previously reported, figures from the Labor Department showed Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 235,000 increase. The unemployment rate fell from 5.7 percent while hourly earnings rose less than forecast.
Attention is on the Fed’s definition of full employment as investors weigh the timing of rate increases. The February unemployment rate dropped to the lowest level since May 2008, and is now within the 5.2 percent to 5.5 percent range the central bank considers to be consistent with stable inflation.
Read more: http://finance.yahoo.com/news/u-stock-index-futures-little-123041074.html
As my spouse commented as I was reading this loudly: that's perverse.
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