[New York Stock Market] Strong Employment Raises Tightening Concerns... Nasdaq Down 1.59%

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market all fell on the last trading day of the week, the 3rd (local time), as strong employment data intensified concerns about tightening. Poor earnings reports from major big tech companies released after the previous day's market close also contributed to dampening investor sentiment.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,926.01, down 127.93 points (0.38%) from the previous session. The large-cap focused S&P 500 index ended at 4,136.48, down 43.28 points (1.04%), and the tech-heavy Nasdaq index closed at 12,006.95, falling 193.86 points (1.59%).

[Image source=Reuters Yonhap News]

All sectors of the S&P 500 declined, with discretionary consumer goods, communication, and utilities sectors experiencing particularly large drops. Apple, which showed weakness in after-hours trading due to poor earnings released after the previous day's close, closed the regular session up 2.44% compared to the previous close. Despite short-term headwinds, Morgan Stanley maintained a 'buy' rating on Apple citing its long-term value. Alphabet, Google's parent company, and Amazon continued to fall during regular trading due to weak earnings, dropping 2.75% and 8.43%, respectively.

Investors closely watched the U.S. employment data and earnings reports from major companies released that day. According to the U.S. Department of Labor, nonfarm payrolls increased by 517,000 in January, more than double the market expectation of 187,000. The unemployment rate in January was 3.4%, down from 3.5% the previous month, marking the lowest level since May 1969. Average hourly wages rose 0.3% month-over-month and 4.4% year-over-year in January. Although wage growth slowed compared to the previous month, the strong employment data somewhat diminished expectations that the Federal Reserve (Fed) would soon halt interest rate hikes.

The service sector economy also returned to expansion. The Institute for Supply Management (ISM) reported a January services (non-manufacturing) Purchasing Managers' Index (PMI) of 55.2, surpassing the baseline of 50.

This fueled market concerns about tightening. According to the Chicago Mercantile Exchange (CME) FedWatch tool, as of that afternoon, the federal funds futures market reflected over a 61% probability that the May benchmark interest rate would reach 5.0?5.25%.

Additionally, the disappointing earnings reports from major big tech companies released the previous day also contributed to the decline in the New York stock market. Michael Wilson of Morgan Stanley predicted that while the stock market could perform stronger than expected this year, "it will now come back to reality."

In the New York bond market, Treasury yields rose. The 10-year U.S. Treasury yield climbed to around 3.52%. The 2-year yield, which is sensitive to monetary policy, also rose to about 4.29%.

The U.S. dollar strengthened as well. The Dollar Index, which measures the value of the dollar against six major currencies, rose more than 1% from the previous close to 102.9.

International oil prices fell amid growing tightening concerns. On the New York Mercantile Exchange, the March delivery West Texas Intermediate (WTI) crude oil price closed at $73.39 per barrel, down $2.49 (3.28%) from the previous session. This closing price was the lowest since January 4.