Dow tumbles 273 points on jobs report

September 10 09:23 2015

Stocks tumbled on Wall Street Friday as investors reacted to the August jobs report — the last monthly employment picture before the Federal Reserve’s key mid-September meeting on interest rates — which produced less new jobs than expected but the lowest reading on the nation’s unemployment rate in more than seven years.USA - Business - Dow Jones Sign

The knee-jerk reaction from traders is that while the report was mixed and didn’t send a definitive signal as to what the data-dependent Fed’s next move will be, it could be strong enough for the Fed to hike rates in two weeks. The Dow Jones industrial average fell 272 points, or 1.7%, to 16,102. The Standard & Poor’s 500 stock index dropped 30 points, or 1.5% to 1921. The Nasdaq composite declined 50 points, or 1.1% to 4684.

The downturn Friday capped off an ugly week for the markets in which the Dow plunged 3.2%, the S&P 500 fell 3.4% and the Nasdaq lost 3%. As bad as the week was, it didn’t come close to what happened just two weeks earlier when the Dow and S&P skidded 5.8% and the Nasdaq tumbled 6.8%. JJ Kinahan, chief market strategist at TD Ameritrade, says the market’s drop this morning could be more related to investors not wanting to take too much risk over the long holiday weekend, noting that Chinese markets, which have been closed the past two days, will reopen Monday while Wall Street is closed for Labor Day.

The jobs report is a market-moving data point, that was especially true this time because it could have swayed the Fed as it is considering raising interest rates for the first time in almost a decade. Wall Street is anxious because low borrowing costs have been a key underpinning of the stock market rally that began back in March 2009. The economy created just 173,000 new jobs last month, the Labor Department said. But the unemployment rate dipped to 5.1%, a bigger-than-expected drop — and the lowest since April 2008, when the jobless rate was 5%, according to data from the U.S. Bureau of Labor Statistics. Wall Street economists were expecting 218,000 new jobs in August and the unemployment rate to decline to 5.2% from 5.3%.

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