US Stocks Fall as Ukraine Fears Eclipse Solid Jobs Data
5:02 pm Friday, March 04th, 2022
Wall Street fell at the end of a volatile week on Friday as the war in Ukraine overshadowed an acceleration in U.S. jobs growth last month that pointed to strength in the economy.
Growth stocks are taking it on the chin relative to the value stocks. The Russell 3000 Growth Index is down 1.5%, versus a 0.8% decline in the Russell 3000 Value Index.
The defensiveness can be shown in the positive performances of the utilities (+1.8%), real estate (+0.2%), and health care (+0.1%) sectors; the 11-basis-point decline in the 10-yr yield to 1.73%, which is resembling a flight to safety; and the 8.5% gain in the CBOE Volatility Index .
The energy sector is also up, but it’s struggling to keep pace with the larger gain in oil prices.
Understandably, the worsening geopolitical news has overshadowed the stronger-than-expected jobs growth indicated in the February employment report, which Chicago Fed President Evans (non FOMC voter) said will not change anything for the Fed in a CNBC interview.
Nonfarm payrolls increased by 678,000 (consensus 400,000), but the more noteworthy figure was the flat growth in average hourly earnings (consensus +0.5%). Given the inflationary environment, featuring $110-per-barrel oil, there are concerns that the stagnant wage growth will translate to less consumer spending.
February unemployment rate was 3.8% (consensus 3.9%), versus 4.0% in January. Persons unemployed for 27 weeks or more accounted for 26.7% of the unemployed versus 25.9% in January. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 7.2%, versus 7.1% in January.
Separately, better-than-expected earnings reports from Costco (COST), Marvell (MRVL), and Gap (GPS) are not getting the reactions shareholders had hoped for, but Broadcom (AVGO) is with a 4% gain.
