NEW YORK (AP) — Stocks are wavering between small gains and losses Friday as Wall Street weighs whether a mixed report on the U.S. jobs market will sway the Federal Reserve from its path to raise interest rates later this year.
The S&P 500 was 0.1% lower in morning trading, while the yield on the 10-year Treasury was near its highest level since COVID-19 began pummeling markets at the start of 2020. The moves were tentative, though, following the mixed reading from the U.S. Labor Department, which is usually the most anticipated piece of economic data every month.
Employers added only about half the number of jobs last month that economists expected, a seeming negative for the economy. But average wages rose more for workers than expected. On the whole, many investors saw the Federal Reserve taking it as evidence that the jobs market is strong enough for it to continue leaning toward raising interest rates more quickly off their record lows. Higher rates could help corral the high inflation sweeping the world but would also make conditions less easy for financial markets.
Immediately after the report’s release, Treasury yields continued the sharp climbs they’ve been on this week as expectations built for the Fed to raise rates more quickly. The yield on the 10-year Treasury rose almost all the way to 1.77% and touched its highest level since January 2020 before pulling back to a little below 1.76%. That’s up from its 1.73% level late Thursday.
Brian Jacobsen, senior investment strategist at Allspring Global Investments, pointed to how hourly wages for workers in the leisure and hospitality businesses were up 14% from a year earlier. That’s a big leap for a group that accounts for roughly one of every eight workers in the private sector.
“It’s a strong report,” Jacobsen said, “and probably confirms for the Fed” that it should remain biased more toward raising rates than continuing to pump more aid into the economy.
The Dow Jones Industrial Average was down 20 points, or 0.1%, at 36,216, as of 10:11 a.m. Eastern time, after earlier flipping between a gain of 21 points and a loss of 95. The Nasdaq composite was virtually unchanged.
Stock markets elsewhere in the world were mixed.
Germany’s DAX lost 0.5%, while South Korea’s Kospi rose 1.2% and Japan’s Nikkei 225 was nearly unchanged.
A resurgence of coronavirus outbreaks has added to uncertainties over a revival of tourism and other business activity in many parts of the world including Asia. The World Health Organization says a record 9.5 million COVID-19 cases were tallied over the last week as the omicron variant of the coronavirus swept the planet, a 71% increase from the previous 7-day period that the U.N. health agency likened to a “tsunami.”
Germany’s leaders were set to consider possible new restrictions and changes to quarantine rules as the new omicron variant was quickly advancing.
Japan approved new restrictions on Friday to curb a sharp rise in coronavirus cases in the three most affected southwestern regions of Okinawa, Yamaguchi and Hiroshima.
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AP Business Writer Elaine Kurtenbach contributed.
