Stocks gave up early gains and ended lower on Wall Street after an unexpectedly strong report on the job market raised concerns that the Federal Reserve will need to keep the pressure on inflation with aggressive interest rate increases. The S&P 500 fell 0.4% after having been up as much as 1% shortly after trading opened. The Dow Jones Industrial Average fell 0.2% and the Nasdaq composite dropped 0.9%. Big technology stocks were the biggest weights on the market, the AP reports. Apple fell 1.8%. Communication services stocks, retailers, and other companies that rely on consumer spending also helped drag down the overall S&P 500, keeping gains in banks, energy firms, and other sectors of the market in check.
The Labor Department reported that US job openings rose unexpectedly in September, suggesting that the labor market is not cooling as fast as the Fed hoped for as it tries to slow economic growth. The latest jobs data, which comes ahead of a broader employment report on Friday, is disappointing for investors who are looking for signs that inflation is easing and that the Fed might consider tempering its interest rate increases. "That really fuels the expectation that the Fed has to do more hiking," said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management. "The labor market is still too tight for the Fed."
Stocks are coming off a strong rally in October that resulted in big monthly gains for some of the major indexes. Even so, they remain in the red for the year, including the S&P 500, which is down 19%. Several big companies made solid gains following encouraging earnings reports and forecasts. Pfizer rose 3.1% after reporting strong results and raising its profit forecast for the year. Uber surged 11.9% after giving investors a strong forecast for future bookings. Rival Lyft rose 3.5%. Earnings remain a big focus for investors this week. CVS reports its results on Wednesday and Starbucks reports earnings on Thursday. Outside of earnings, Abiomed surged 49.9% after health care giant Johnson & Johnson said it will pay $16.6 billion for the heart pump maker. Johnson & Johnson fell 0.5%.
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