Major Averages Turning In Mixed Performance Amid Volatile Session

Stocks moved sharply lower in early trading on Friday but have fluctuated wildly over the course of the session. Currently, the major averages are off their early lows, turning in a mixed performance.

After falling more than 200 points early in the session, the Dow is up 47.66 points or 0.2 percent at 32,774.48. Meanwhile, the Nasdaq is down 58.03 points or 0.5 percent at 12,662.55 and the S&P 500 is down 8.46 points or 0.2 percent at 4,143.48.

The volatility on Wall Street comes as traders react to the Labor Department’s closely watched monthly jobs report.

The report showed employment in the U.S. jumped by much more than expected in the month of July, leading to concerns about the outlook for interest rates.

The report showed non-farm payroll employment spiked by 528,000 jobs in July after surging by an upwardly revised 398,000 jobs in June.

Economists had expected employment to climb by about 250,000 jobs compared to the addition of 372,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate unexpectedly edged down to 3.5 percent July from 3.6 percent in June. The unemployment rate was expected to remain unchanged.

While the data paints a positive picture of the labor market, the report may also give the Federal Reserve confidence they can continue aggressively raising interest rates without causing a recession.

“The unexpected acceleration in non-farm payroll growth in July, together with the further decline in the unemployment rate and the renewed pick-up in wage pressure, make a mockery of claims that the economy is on the brink of recession,” said Michael Pearce, Senior U.S. Economist at Capital Economics.

He added, “This raises the odds of another 75bp rate hike in September, although the outcome depends more on the evolution of the next couple of CPI reports.”

Sector News

Energy stocks continue to see substantial strength, regaining ground following weakness. The rebound comes as crude oil for September delivery is rising $0.51 to $89.05 a barrel after falling to the lowest levels since Russia’s invasion of Ukraine.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 2.8 percent and the NYSE Arca Oil Index is up by 2.6 percent.

Considerable strength also remains visible among steel stocks, as reflected by the 2.2 percent jump by the NYSE Arca Steel Index.

On the other hand, gold stocks are seeing significant weakness on the day, resulting in a 1.9 percent slump by the NYSE Arca Gold Bugs Index.

The weakness among gold stocks comes amid a decrease by the price of the precious metal, with gold for December delivery falling $15.80 to $1,791.10 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index advanced by 0.9 percent, while China’s Shanghai Composite Index jumped by 1.2 percent.

Meanwhile, the major European markets moved to the downside on the day. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index fell by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries have moved sharply lower following the stronger than expected jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 15.6 basis points at 2.832 percent.

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