US close: Stocks slide as payrolls data comes in strong

(Sharecast News) - US stocks closed sharply lower on Friday after a volatile session, as stronger-than-expected non-farm payrolls data reignited concerns about prolonged Federal Reserve interest rate hikes. The Dow Jones Industrial Average fell 1.63%, ending at 41,938.45, while the broader S&P 500 dropped 1.54% to close at 5,827.04, and the tech-heavy Nasdaq Composite declined 1.63%, finishing at 19,161.63.

In currency markets, the dollar was last up 0.17% on sterling, trading at 82.06p, as it edged up 0.05% against the euro to 97.66 euro cents, but weakened slightly against the yen, slipping 0.14% to change hands at JPY 157.51.

"Friday's US jobs report detonated like a financial bombshell, sending shockwaves across Wall Street as stocks tumbled and bonds buckled under the unexpected vigour of the American labour market," said SPI Asset Management managing partner Stephen Innes.

"Nonfarm payrolls skyrocketed to a staggering 256,000, obliterating the forecasts and sending a clear signal: the US economy is not just alive; it's kicking hard.

"This explosive revelation puts a firm pause on any whispers of imminent rate cuts, with the Federal Reserve now perched on a tightrope of robust economic indicators."

Nonfarm payrolls end 2024 in better-than-expected state

In economic news, the US labour market ended 2024 with stronger-than-anticipated job growth, defying forecasts for a more modest gain.

The Department of Labor reported a seasonally adjusted increase of 256,000 non-farm payrolls in December, significantly outpacing the consensus estimate of 165,000.

Revisions to the prior two months' data trimmed job growth by 8,000.

Average hourly earnings grew by 0.3% on a monthly basis, aligning with expectations, while the unemployment rate edged down to 4.1% from 4.2%.

The labour force participation rate held steady at 62.5%, signaling continued stability in workforce engagement.

Hiring was concentrated in the services sector, which added 231,000 jobs in December, up from 148,000 in November.

In contrast, goods-producing industries shed 8,000 positions, while government employment increased by 33,000.

Commenting after the latest data, Thomas Ryan at Capital Economics noted how the year-on-year rate of increase in earnings growth had dipped from 4.0% in November to 3.9%.

That, he said, would reassure the Fed after the high level of services inflation and the increase in the ISM services prices paid index seen during just the last week.

"Nevertheless, the odds have increased that the Fed is close to being finished with its loosening cycle, particularly if the incoming Trump administration pushes ahead with a stagflationary mix of tariffs and immigration curbs."

Constellation Energy in the green, insurers under pressure amid wildfires

In equity markets, Constellation Energy Corporation soared 25.16% after announcing a $26.6bn merger with privately owned peer Calpine.

The deal was expected to create a major player in the power generation industry, boosting investor optimism.

Walgreens Boots Alliance surged 27.55% after beating first-quarter earnings expectations and reaffirming its full-year guidance.

In the airline sector, Delta Air Lines jumped 9% on heavy trading volume after surpassing fourth-quarter earnings and sales estimates.

The stock reached an all-time high, rebounding from recent dips.

Delta's competitors also benefited, with United Airlines Holdings gaining 3.27% and hitting a record high, while American Airlines Group rose 4.43% to levels not seen since mid-2023.

On the downside, insurance stocks faced sharp declines, pressured by the growing costs of the ongoing wildfires in Los Angeles.

Allstate Corporation fell 5.64%, while American International Group and Chubb declined 1.3% and 3.35%, respectively.

Travelers Companies lost 4.26%, as concerns over rising claims weighed on the sector.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Walgreens Boots Alliance, Inc. (WBA) $11.76 27.55% Chevron Corp. (CVX) $153.14 1.89% Walmart Inc. (WMT) $93.00 1.31% Home Depot Inc. (HD) $389.89 0.69% Boeing Co. (BA) $172.00 0.14% Dowdupont Inc. (DWDP) $0.00 0.00% Nike Inc. (NKE) $71.20 -0.13% Johnson & Johnson (JNJ) $142.06 -0.15% Merck & Co. Inc. (MRK) $99.25 -0.60% Unitedhealth Group Inc. (UNH) $520.69 -0.73%

Dow Jones - Fallers

Travelers Company Inc. (TRV) $232.43 -4.26% Intel Corp. (INTC) $19.15 -3.67% Goldman Sachs Group Inc. (GS) $560.00 -3.45% American Express Co. (AXP) $293.30 -3.15% Verizon Communications Inc. (VZ) $37.81 -2.90% Caterpillar Inc. (CAT) $351.00 -2.79% Salesforce.Com Inc. (CRM) $317.85 -2.77% 3M Co. (MMM) $131.21 -2.47% Apple Inc. (AAPL) $236.85 -2.41% Procter & Gamble Co. (PG) $158.56 -2.18%

S&P 500 - Risers

Walgreens Boots Alliance, Inc. (WBA) $11.76 27.55% Delta Airlines Inc. (DAL) $66.99 9.00% VF Corp. (VFC) $22.79 5.80% Helmerich & Payne Inc. (HP) $34.29 4.48% American Airlines Group (AAL) $18.38 4.43% CVS Health Corp (CVS) $48.01 4.35% Whirlpool Corp. (WHR) $118.01 4.01% Apartment Investment & Management Co. (AIV) $8.91 3.83% United Airlines Holdings Inc (UAL) $107.11 3.27% HF Sinclair Corporation (DINO) $35.88 3.19%

S&P 500 - Fallers

Constellation Brands Inc. Class A (STZ) $181.81 -17.09% Jefferies Financial Group Inc. (JEF) $71.48 -10.79% Nektar Therapeutics (NKTR) $1.03 -9.65% Edison International (EIX) $65.00 -6.47% Brown Forman Corp. Class B (BF.B) $33.90 -5.92% TripAdvisor Inc. (TRIP) $14.20 -5.84% Molson Coors Beverage Co. Class B (TAP) $52.44 -5.67% Allstate Corp (The) (ALL) $180.99 -5.64% Vornado Realty Trust (VNO) $37.75 -5.48% Equinix, Inc. (EQIX) $899.83 -5.38%

Nasdaq 100 - Risers

Walgreens Boots Alliance, Inc. (WBA) $11.76 27.55% American Airlines Group (AAL) $18.38 4.43% Dollar Tree Inc (DLTR) $72.90 1.29% Mercadolibre Inc. (MELI) $1,758.77 1.14% Costco Wholesale Corp. (COST) $936.94 1.03% Meta Platforms Inc. (META) $615.86 0.84% Gilead Sciences Inc. (GILD) $89.88 0.83% Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $418.23 0.74% Intuitive Surgical Inc. (ISRG) $547.47 0.63% Seagate Technology Plc (STX) $88.87 0.20%

Nasdaq 100 - Fallers

Qurate Retail Inc. (QRTEA) $0.35 -6.55% Paypal Holdings Inc (PYPL) $83.36 -5.21% eBay Inc. (EBAY) $65.90 -5.04% Regeneron Pharmaceuticals Inc. (REGN) $696.88 -5.00% Liberty Global plc Series C (LBTYK) $12.21 -4.98% Liberty Global plc Series A (LBTYA) $11.89 -4.96% Baidu Inc. (BIDU) $77.43 -4.81% JD.com, Inc. (JD) $33.10 -4.67% Netflix Inc. (NFLX) $837.69 -4.26% Verisk Analytics Inc. (VRSK) $268.63 -4.20%