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Market Snapshot: Dow wobbles as jobs report shows gain of 194,000 in September as people drop out of labor force

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U.S. stock indexes were slightly higher Friday morning, bouncing around in choppy trade, after a monthly report on the labor market came in much weaker than expected, raising some questions about the path forward for the Federal Reserve that had looked ready to reduce its bond purchases as the economy recovers from the pandemic.

How are stock-index futures trading?
  • The Dow Jones Industrial Average
    DJIA,
    +0.05%

    were down 24 points, or less than 0.1%, at 34,722.
  • The S&P 500
    SPX,
    +0.17%

    was trading less than a point lower at 4,399.
  • The Nasdaq Composite Index
    COMP,
    +0.16%

    was off by about 10 points, or 0.1%, at 14,643.

On Thursday, the Dow
DJIA,
+0.05%

rose 338 points, or 0.98%, to 34755, the S&P 500
SPX,
+0.17%

increased 36 points, or 0.83%, to 4400, and the Nasdaq Composite
COMP,
+0.16%

gained 152 points, or 1.05%, to 14654.

What’s driving the market?

Markets were whipsawed early Friday as investors digested data that showed the U.S. economy created far fewer jobs than had been expected in September. The question now is whether employment gains are sufficient to keep the Federal Reserve on track to scale back monetary policy stimulus.

Nonfarm payrolls rose by just 194,000 in the month, compared to the Dow Jones estimate of 500,000, the Labor Department reported Friday. However, the unemployment rate fell to 4.8%, versus expectations for 5.1%, and August’s report was raised 366,000 from 235,000.

“Even considering the upward revisions to prior months of an extra 169,000 jobs, today’s number was still a huge miss compared to the 500,000 jobs economists were expecting,” wrote Bryce Doty is senior portfolio manager at Sit Fixed Income Advisors , in emailed comments.

The spread this summer of coronavirus delta variant likely discouraged job seekers in September, despite many companies being desperate to hire, economists and business leaders say.

The labor market remains depleted from last year’s recession and job growth was stronger earlier this year. In the first seven months of 2021, the economy added an average 636,000 jobs a month.

“This jobs number could call into question the starting point for taper late this year,” said Jamie Cox, Managing Partner for Harris Financial Group in Richmond, Va., “There are lots of positives in the report, like an uptick in average hourly earnings, but not enough to sugar coat the fact the employment picture remains murky with all the covid related cross currents.”

Meanwhile, Washington avoided an unprecedented federal default after the Senate voted late Thursday to raise the government’s debt ceiling into December. The reprieve is temporary as lawmakers must head back to the bargaining table before the end of the year.

Optimism around a deal was enough to rally stocks, but that faded by Friday as investors took to the sidelines ahead of September payrolls data.

Which companies are in focus?
  • Camber Energy Inc. CEI remained the hottest name on Wall Street, as the oil-and-gas company’s stock is once again the most actively traded on major U.S. exchanges ahead of Friday’s open as the recent rollercoaster ride looked set to continue.
  • Shares of ChemoCentryx Inc. CCXI soared on Friday after the company said that it had received approval from the Food and Drug Administration for its ANCA-associated vasculitis therapy.
  • Sam’s Club, the Walmart Inc. WMT warehouse shopping club, announced its holiday plans on Friday, which include the launch of a direct-to-home wine delivery service.
  • U.S.-listed shares of AstraZeneca AZN, +0.74% gained on Friday after the company said an experimental asthma drug it is developing with Amgen AMGN has been given an orphan drug designation as a treatment for eosinophilic esophagitis, a rare inflammatory disease.
How are other assets trading?
  • The U.S. oil benchmark 
    CL00,
    +2.11%

    BRNX21
    was up 1% to $79.11 a barrel, and headed for its seventh-straight weekly gain, with the contract up 4% for the week. Gold futures 
    GC00,
    +0.31%

     were up modestly at $1,759.80 an ounce.

  • The ICE U.S. Dollar Index 
    DXY,
    -0.12%
    ,
     a measure of the currency against a basket of six major rivals, was flat.
  • In European equities trade, the Stoxx Europe 600 
    SXXP,
    -0.10%

    fell 0.3% and London’s FTSE 100 UKX, -0.03% was flat.
  • China’s CSI 300 index
    000300,
    +1.31%

    rose 1.3% as markets returned from a multiday holiday. Japan’s Nikkei 225 
    NIK,
    +1.34%

    gained 1.3%.

Metals Stocks: Gold futures climb after ‘feeble’ reading on September U.S. employment

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