Big losses for US stocks as job report disappoints

29 out of 30 blue chips post weekly losses

U.S. stocks ended Friday's session sharply lower on 05 September 2015, as a highly anticipated monthly jobs report intensified the debate about the Federal Reserve's decision to raise interest rates in September. The employment report began a downbeat day for the market as investors seemed to read the data as signaling that the Fed may soon decide to end its ultra loose monetary policy in two weeks. The jobs data showed that the U.S. economy added a weaker-than-estimated 173,000 nonfarm jobs last month, while the unemployment rate dropped to 5.1% marking its lowest level since April 2008. Friday's losses capped another brutal week for the main indexes, which suffered their second-largest weekly losses this year.

The Dow Jones Industrial Average dropped 272.38 points, or 1.7%, to 16,102.38, recording a 3.3% loss over the week. Among the blue-chip stocks, 29 out of 30 posted weekly losses, with the Dow losing more than 1,550 points over the past two weeks. The Nasdaq Composite ended the day down 49.58 points, or 1.1% at 4,683.92 and posted a 3% weekly loss. The S&P 500 closed 29.91 points, or 1.5% lower at 1,921.22 and fell 3.4% over the week. Among the biggest decliners this week were utilities stocks, health-care and financials stocks.

Friday's release of the Nonfarm Payrolls report for August appeared mediocre as the headline number came in below expectations. The U.S. economy in August saw its smallest employment gains in five months, according to the Labor Department on Friday, adding a modest 173,000 new jobs, while unemployment fell to 5.1% its lowest level since April 2008. The report is unlikely to deter the Federal Reserve from raising the fed funds rate as early as this month. However, revisions for June and July showed 44,000 extra jobs were created in the first two months of summer.

Treasuries fell from their overnight highs immediately after the report, but the 10-yr note found support on its flat line. The benchmark instrument traded little changed as the equity market opened, but returned to its overnight high as equities retreated throughout the day. Thanks to the intraday strength in Treasuries, the 10-yr yield fell four basis points to 2.12%.

Interestingly, the Dollar Index only saw a brief spike back to its flat line after the jobs report before setting a fresh session low. The greenback surrendered about 0.2% to the euro and gave up 0.9% against the yen.

Bullion prices ended lower at Comex on Friday, 04 September 2015. Gold futures settled at their lowest level in more than two weeks on Friday, tallying a weekly loss of 1.1% in the wake of the monthly U.S. jobs report, which offered a mixed picture of the health of the U.S. labor market.

Gold futures for December delivery lost $3.10, or 0.3%, to settle at $1,121.40 an ounce on Comex. Prices fell 1.1% for the week. December silver lost 15.8 cents, or 1.1%, to $14.549 an ounce, for a weekly gain of roughly 0.1%. Silver prices performed slightly better this week, despite also ending its second consecutive week in negative territory.

Crude oil prices finished with a loss on Friday, 04 September 2015 but scored their second weekly gain in a row. During the session prices cut their losses following data showing a weekly decline in the number of active U.S. oil-drilling rigs. Oil's moves came as monthly U.S. jobs data offered a mixed picture of the labor market, but perhaps did little to directly influence the Federal Reserve's decision on interest rates.

October West Texas Intermediate crude fell 70 cents, or 1.5%, to settle at $46.05 a barrel on the New York Mercantile Exchange after touching an intraday low of $45.71. For the week, however, prices rose 1.8%.

Bond and equity markets will be closed on Monday in observance on Labor Day.

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