Stocks mostly fall after US hiring disappoints

·3-min read
We're hiring... but not all that many people. The latest US jobs data missed expectations for the number of jobs created and experts said it showed the US labour market remains tight (AFP/JOE RAEDLE)

Stocks mostly fell Friday on both sides of the Atlantic after data showed that the US economy added far fewer jobs than expected last month and eurozone inflation hit a record high.

London's FTSE 100 index bucked the trend, ending the day 0.5 percent higher, but Paris and Frankfurt slid.

On Wall Street, the Dow treaded water, but both the S&P 500 and Nasdaq declined to conclude a down week for US stocks.

Asia faced a mixed trading session after another round of losses on Wall Street on Thursday as investors continued to mull signals by the US Federal Reserve that it was ready to tighten monetary policy more quickly to combat spiking inflation.

The dollar dipped, while oil pulled back modestly after days of strong gains.

Government data showed that the US economy added only 199,000 jobs in December.

While that was less than half of what analysts expected, the unemployment rate fell to 3.9 percent, wages rose strongly and participation in the labor force held steady, indicating the job market remains tight.

"The key takeaway from the report is that it shows the Fed is close to meeting its objective of maximum employment and that wage growth in a tight labour market risks feeding into more persistent inflation pressures that will need to be addressed with a tighter policy position," said market analyst Patrick O'Hare at Briefing.com.

Surging inflation has pushed the Fed to begin to wind down its bond-buying stimulus program ahead of raising interest rates, and central banks in a number of other countries have already raised rates.

Minutes released earlier this week from the Fed's December policy meeting signaled a more aggressive rate-tightening path, arguing "it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated."

There were also indications officials were considering reducing its massive bond holdings, putting further upward pressure on lending costs..

"Investors remain apprehensive following the Federal Reserve's move to a more hawkish stance, with the jobs report later providing further colour to the economic backdrop," said Richard Hunter, head of markets at Interactive Investor..

Data showing that eurozone inflation hit a record high of 5.0 percent in December was likely to heap additional pressure on the European Central Bank, which has so far indicated it has no plans to raise interest rates this year.

The surge in prices in recent months is mainly due to the exceptional rise in gas and electricity prices.

In December, the annual increase in energy prices reached 26 percent, far ahead of the other products surveyed in Eurostat's basket.

- Key figures around 2100 GMT -

New York - DOW: FLAT at 36,231.66 (close)

New York - S&P 500: DOWN 0.4 percent at 4,677.03 (close)

New York - Nasdaq: DOWN 1.0 percent at 14,935.90 (close)

London - FTSE 100: UP 0.5 percent at 7,485.28 (close)

Frankfurt - DAX: DOWN 0.7 percent at 15,947.74 (close)

Paris - CAC 40: DOWN 0.4 percent at 7,219.48 (close)

EURO STOXX 50: DOWN 0.4 percent at 4,305.83 (close)

Tokyo - Nikkei 225: FLAT at 28,478.56 (close)

Hong Kong - Hang Seng Index: UP 1.8 percent at 23,493.38 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,579.54 (close)

Euro/dollar: UP at $1.1365 from $1.1297 late Thursday

Pound/dollar: UP at $1.3589 from $1.3532

Euro/pound: UP at 83.59 pence from 83.48

Dollar/yen: DOWN at 115.55 yen from 115.83 yen

Brent North Sea crude: DOWN 0.3 percent $81.75 per barrel

West Texas Intermediate: DOWN 0.7 percent at $78.90 per barrel

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