U.S. Stocks Cap Worst Week of 2019 After Jobs Data: Markets Wrap

(Bloomberg) -- U.S. stocks slumped with the dollar after a report showed American hiring was the weakest in more than a year while wage gains were the fastest of the expansion.

The S&P 500 Index closed slightly lower for its fifth straight drop and worst week of the year, and Treasury yields fell to a two-month low amid concern the labor market is starting to slow. Shares pared declines late in the day as some analysts focused on the longer-term positive trend for jobs. The Stoxx Europe 600 Index sank the most in a month after Asian shares dropped. The euro climbed after closing at its lowest level since 2017 on Thursday, when the European Central Bank slashed growth forecasts.

Investors had been waiting for the jobs report to provide more clues on the state of the world’s biggest economy and were surprised to learn U.S. nonfarm payrolls increased by 20,000 last month, trailing estimates for a 180,000 increase. The news came a day after ECB President Mario Draghi delivered fresh stimulus as he downgraded the outlook for the euro area. This week, China cut its goal for economic expansion, the Bank of Canada dialed back its expectations for policy tightening and the OECD lowered its global outlook.

“Taken at face value, it didn’t look like a very good number,” said Charlie Ripley, senior market strategist for Allianz Investment Management. “But looking into the details, and understanding that weather could have been a factor and the shutdown could have played a factor, brought some noise into this report. I think people realized it’s not that bad overall.”

The S&P 500 closed near a four-week low. Its weekly decline of 2.2 percent was the worst since December. China’s stock market slumped the most since October as traders interpreted a rare sell rating from the nation’s largest brokerage as a sign the government wants to curb gains. Weak Chinese trade data added to the negativity.

Elsewhere, the yen climbed with gold as investors sought havens. The pound slipped as Prime Minister Theresa May appealed to members of Parliament to back her deal or risk seeing Brexit canceled. West Texas oil futures fell as the weakening outlook for the global economy and rising crude stockpiles signaled that markets will remain comfortably supplied. Stocks in emerging markets dropped.

These are the latest moves in markets:

Stocks

• The S&P 500 Index fell 0.2 percent at the close of trade in New York.
• The Dow Jones Industrial Average dipped 0.1 percent; its fifth consecutive decline was the longest losing streak since June
• The Stoxx Europe 600 Index sank 0.9 percent.
• The U.K.’s FTSE 100 Index dropped 0.7 percent.
• The MSCI Emerging Market Index fell 1.3 percent to the lowest since January.

Currencies

• The Bloomberg Dollar Spot Index decreased 0.3 percent, the first retreat in more than a week.
• The euro increased 0.4 percent to $1.1233, the first advance in more than a week.
• The British pound fell 0.6 percent to $1.3005, its seventh consecutive decline.
• The Japanese yen advanced 0.4 percent to 111.12 per dollar.

Bonds

• The yield on 10-year Treasuries fell two basis points to 2.62 percent.
• Germany’s 10-year yield rose one basis point to 0.07 percent.
• Britain’s 10-year yield rose two basis points to 1.19 percent.

Commodities

• West Texas Intermediate crude dropped 1 percent to $56.11 a barrel.
• Gold climbed 1.2 percent to $1,300.48 an ounce.
• The Bloomberg Commodity Index fell 0.1 percent.

--With assistance from Scarlet Fu, Adam Haigh, Christopher Anstey, Robert Brand and Todd White.

To contact the reporter on this story: Reade Pickert in New York at epickert@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh

©2019 Bloomberg L.P.