WASHINGTON (dpa-AFX) - Stocks have moved sharply lower during trading on Friday, with the major averages all showing significant moves to the downside after ending Wednesday's lackluster session narrowly mixed.
Currently, the major averages are off their worst levels of the day but still firmly negative. The Dow is down 638.94 points or 1.5 percent at 41,996.26, the Nasdaq is down 370.35 points or 1.9 percent at 19,108.53 and the S&P 500 is down 91.35 points or 1.5 percent at 5,826.90.
The sell-off on Wall Street comes following the release of the Labor Department's closely watched monthly employment report.
The report showed much stronger than expected job growth in the month of December, adding to recent concerns about the outlook for interest rates.
The Labor Department said non-farm payroll employment surged by 256,000 jobs in December after jumping by a downwardly revised 212,000 jobs in November.
Economists had expected employment to climb by 160,000 jobs compared to the addition of 227,000 jobs originally reported for the previous month.
The report also said the unemployment rate edged down to 4.1 percent in December from 4.2 percent in November. Economists had expected the unemployment rate to come in unchanged.
While the report points to continued strength in the labor market, the data is also likely to give the Federal Reserve confidence in its plan to gradually lower interest rates over the coming year.
'The Fed already took the foot of the brake somewhat in late 2024, as the unemployment rate edged higher and private hiring cooled,' said Bill Adams, Chief Economist for Comerica Bank. 'But they will see December's solid jobs report as evidence that there is no urgency to take their foot off the brake entirely.'
He added, 'Also, the Fed is concerned that another round of fiscal stimulus, higher tariffs, and immigration restrictions could further juice economic growth, raise inflation, and tighten the labor market, more support for a wait-and-see approach for additional cuts.'
Sector News
Financial stocks are turning in some of the market's worst performances on the day, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index plunging by 3.0 percent and 2.7 percent, respectively.
Substantial weakness is also visible among semiconductor stocks, as reflected by the 2.6 percent slump by the Philadelphia Semiconductor Index.
Telecom, software and commercial real estate stocks are also seeing considerable weakness, while airline stocks are among the few groups bucking the downtrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index slumped by 1.1 percent, while China's Shanghai Composite Index tumbled by 1.3 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index is down by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both down by 0.8 percent.
In the bond market, treasuries have moved notably lower in reaction to the monthly jobs report. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.0 basis points at 4.751 percent.
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