Wall Street falls early as jobs data disappoints

WALL STREET FALLS EARLY AS JOBS DATA DISAPPOINTS (1020 EST/1520 GMT)

Major U.S. stock indexes are down in early trading Friday, with data showing U.S. employers hired more workers than expected in November along above estimates wage growth.

The data disappointed investors who have been worried about aggressive interest rate hikes by the Federal Reserve, which has been trying to combat rising inflation.

All of the major S&P 500 SPX are lower in early trading, with information technology S5INFT leading the way down. Tech and growth shares have been more negatively affected by rising rates.

Also, the Nasdaq IXIC is underperforming the other two major indexes.

(Caroline Valetkevitch)

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U.S. STOCK FUTURES SLIDE ON HOT NFP DATA (0900 EST/1400 GMT)

U.S. equity index futures are sharply lower in the wake of the release of the latest data on jobs.

The November non-farm payroll headline jobs came in at 263k vs a 200k estimate. The unemployment rate was 3.7% vs a 3.7% estimate. Of note, wage data, both on a month-over-month and year-over-year basis, was hotter than expected:

According to the CME's FedWatch Tool (FEDWTACH), the probability of a 50 basis point rate hike at the December FOMC meeting has now fallen to about 72% from 77% before the numbers were released. There is now about a 28% chance of a 75 basis point move up from around 23% just before the data came out.

CME e-mini Nasdaq 100 futures NQ1! are leading U.S. equity index futures lower, sliding around 2%. They were just below flat just before the numbers came out.

All 11 S&P 500 sector SPDR ETFs are quoted down in premarket trade, with more growth-oriented groups such as communication services S5TELS and tech XLK taking the biggest hits.

CME e-mini S&P 500 futures ES1! are off more than 50 points suggesting the S&P 500 index SPX, which closed at 4,076.57 on Thursday, will break back below its 200-day moving average, which ended at 4,048.33 on Thursday, at the open. There is support at 4,006. The 100-DMA ended Thursday around 3,923.

Regarding the jobs data, Quincy Krosby, chief global strategist at LPL Financial, said:

"The market expected a weaker number, closer to consensus estimates. 263,000 jobs is obviously more than consensus. The Fed rate hikes have begun to soften the employment landscape; however, the economy remains resilient."

She added "This is not what the market wants to see at this point. We're still showing a slowing in the labor market, but it's not enough to satisfy the Fed and to satisfy the market."

Additionally, Krosby noted, "Wages climbed higher. This is not what the Fed wants to see. In fact, they want to see it pull back. Hourly wages are a major concern for the Fed. This and rents are two of the major focus (points) for the Fed."

Here is a premarket snapshot:

(Terence Gabriel, Caroline Valetkevitch)

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