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Stocks Pare Losses After Jobs Report

Stocks Pare Losses After Jobs Report #Stocks #Pare #Losses #Jobs #Report Welcome to TmZ Blog, here is the new story we have for you today:

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U.S. stocks finished Friday close to flat after a surprisingly strong jobs report cast doubt on the Federal Reserve being able to shift away from interest-rate increases anytime soon.

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Investors had come to widely believe that the Fed could pivot to cutting interest rates as early as the first half of 2023, given signs of cooling activity across the economy. That would have been a balm for markets, which have tumbled this year as the Fed has swiftly raised interest rates to combat stubbornly high inflation.

But Fridays data showed the labor market was doing anything but cooling. The labor market added 528,000 jobs in Julymore than doubling what analysts had estimated and returning payrolls to their prepandemic level. Meanwhile, the unemployment rate fell to 3.5%, near historic lows.

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That left investors with a mixed picture: A key pillar of the economy remains strong, which should be good news for markets. But strong data means the rate increases that have sent stock and bond prices lower this year arent likely to go away anytime soon.

It also raises questions about whether stocks can continue their recent comeback. The S&P 500 and Nasdaq Composite have now risen for three straight weeks, chipping away at a substantial portion of their losses from the rest of the year.

The S&P 500 dropped 6.75 points, or 0.2%, to 4145.19 on Friday, making up most of its losses from early in the trading day. For the week, it rose 0.4%. The Dow Jones Industrial Average was up 76.65 points, or 0.2%, to 32803.47 and fell 0.1% for the week. The Nasdaq Composite declined 63.03 points, or 0.5%, to 12657.55 and rose 2.2% for the week.

Bond prices fell, with the yield on the benchmark 10-year Treasury note jumping to 2.838% from 2.674% Thursday.

Todays jobs report is the exact opposite of a slowing economy, said

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Thomas Tzitzouris,

head of fixed-income research at Strategas. This report means its going to be very difficult to support the view of rate cuts happening anytime before the end of next year.

Amid a record hiring streak in the U.S., economists are watching for signs of a possible wave turn. WSJs Anna Hirtenstein looks at how rising interest rates, high inflation, market selloffs and recession risks challenge the growth of Americas workforce. Photo: Olivier Douliery/AFP

Despite the upbeat jobs report, the spread in yields between shorter-term and longer-term bonds widened further, deepening whats known as a yield curve inversion. Investors typically demand more income to hold longer-term bonds over shorter-term ones. When shorter-term ones offer higher yields, the economy has often later slipped into recession.

Shares of

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AMC Entertainment

rose $3.52, or 19%, to $22.18 after the cinema chain said revenue quintupled in the recent quarter and that it would issue a special dividend in the form of preferred shares.

Virgin Galactic

shares fell $1.43, or 17%, to $6.76 after the company delayed its initial launch of tourists into space.

Warner Bros. Discovery

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shares declined $2.89, or 17%, to $14.59 after the new company swung to a $3.42 billion loss in the second quarter, which it said was partly due to charges related to the recent merger that created the media giant.

Traders working on the floor of the New York Stock Exchange on Thursday.

Photo:

justin lane/Shutterstock

Overseas, the pan-continental Stoxx Europe 600 fell 0.8%.

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In Asia, major indexes closed with gains. Japans Nikkei 225 added 0.9%, South Koreas Kospi rose 0.7% and Chinas Shanghai Composite gained 1.2%.

Write to Akane Otani at akane.otani@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com

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Appeared in the August 6, 2022, print edition as ‘Stock Market Sees Mixed Signals in Jobs Report.’

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