[Asia Economy New York=Correspondent Baek Jong-min] The major indices on the New York Stock Exchange closed lower as concerns over tightening spread due to strong employment data. The market turned downward following the announcement of a rights offering by AMC, a 'meme stock' that had surged sharply.
On the 3rd (local time), the Dow Jones Industrial Average fell 23.34 points (0.07%) to close at 34,577.04, the S&P 500 index dropped 15.27 points (0.36%) to 4,192.85, and the Nasdaq index declined 141.82 points (1.03%) to 13,614.51.
The private employment data for May, compiled by ADP and released that morning, approached 1 million, heightening concerns about tightening. ADP's figures raised expectations that the Labor Department's employment report for May, scheduled for release the following day, would show significant improvement. This led to fears that the Federal Reserve's tightening policy could begin sooner than expected.
The weekly initial jobless claims compiled by the Labor Department also fell into the 300,000 range for the first time since the COVID-19 pandemic.
With employment indicators showing strength, the yield on the U.S. 10-year Treasury note rose from 1.591% the previous day to 1.622%. An increase in Treasury yields means a decline in bond prices.
As Treasury yields climbed, technology stocks showed weakness. Major tech stocks such as Apple and Amazon mostly fell by about 1%. Bank stocks, however, rose due to the positive effect of higher Treasury yields.
News that U.S. President Joe Biden expanded the 'blacklist' of Chinese companies banned from investment by Americans to 59 added further pressure on the market.
Market attention was focused on AMC, a 'meme stock.' The theater chain AMC, which had surged 95% the previous day, rose 20% in pre-market trading but closed down 18% after news of a large-scale rights offering emerged.
AMC's stock price rose up to 20% before the market opened but gave up all gains and closed down about 18% following the announcement of new share sales. The stock had risen about 95% the day before.
Another meme stock, BlackBerry, rose 4%, but Bed Bath & Beyond and Koss shares plunged 28% and 24%, respectively. GameStop, the leader among meme stocks, also fell 8%.
Automakers' stock prices were mixed. Tesla's shares dropped more than 5% after reports that its May sales in China fell to half of the previous month’s level, while General Motors (GM) rose more than 6% on news of expanded production of mid-to-large pickup trucks in North America.
On the New York Mercantile Exchange, July West Texas Intermediate (WTI) crude oil prices closed at $68.81 per barrel, down 2 cents (0.03%) from the previous session.
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