Stocks Move Moderately Lower In Reaction To Jobs Data - U.S. Commentary

(RTTNews) - Stocks have moved mostly lower in early trading on Friday, extending the notable downward move seen in the previous session. The major averages have slid into negative territory, with the Dow falling to its lowest levels in six months.

The major averages have recently climbed off their lows for the young session but remain in the red. The Dow is down 64.08 points or 0.4 percent at 17,355.67, the Nasdaq is down 21.40 points or 0.4 percent at 5,035.04 and the S&P 500 is down 6.21 points or 0.3 percent at 2,077.35.

A negative reaction to the Labor Department's highly anticipated monthly jobs report is contributing to the early weakness on Wall Street.

The report showed somewhat weaker than expected job growth in July, but the data was widely seen as strong enough to support an increase in interest rates in September.

The Labor Department said non-farm payroll employment rose by 215,000 jobs in July following an upwardly revised increase of 231,000 jobs in June.

Economists had expected employment to climb by about 223,000 jobs, which would have matched the increase originally reported for the previous month.

The report also said the unemployment rate held at 5.3 percent in July, unchanged from the seven-year low set in June. The unchanged reading matched economist estimates.

"The July Jobs report is ok," said James Knightley, an economist at ING Bank. "It is strong enough to keep the September rate hike our central case, but we will need to see something similar or better next month to give the market reasonable confidence that it will indeed happen."

Considerable weakness has emerged among tobacco stocks, as reflected by the 2.8 percent loss being posted by the NYSE Arca Tobacco Index. Universal (UVV) is leading the sector lower after reporting a first quarter net loss.

Biotechnology and trucking stocks are also seeing early weakness, while gold stocks have shown a strong move to the upside.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index rose by 0.3 percent and Hong Kong's Hang Seng Index advanced by 0.7 percent, while Australia's All Ordinaries Index tumbled by 2.3 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.2 percent, the French CAC 40 Index and the German DAX Index are down by 0.4 percent and 0.5 percent, respectively.

In the bond market, treasuries have moved higher in reaction to the monthly jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.9 basis points at 2.195 percent.