Weak US jobs growth tempers Wall Street

A weaker-than-expected US jobs report for August weighed heavily on Wall Street’s main benchmarks today.

The S&P 500 slipped 0.09 per cent to 4,532.82 points, after closing at a record high yesterday. The Dow Jones lost 0.11 per cent to hit 4,531.09 points.

The tech-heavy Nasdaq provided some relief on Wall Street, rising 0.12 per cent to 15,349.99 points.

Hiring in the US economy in August plunged far below expectations as the spread of the Delta variant of Covid across America weighed heavily on employer and employee confidence. 

Nonfarm payrolls jumped by 235,000 over the last month. Economists had expected job growth to come in at 728,000.

Yields on 10-year Treasuries rose 0.03 basis points to 1.324 per cent.

Rallying pound weighs on FTSE 100

London’s FTSE 100 dropped today, putting a damper on a relatively strong week for the blue-chip index.

The capital’s premier index dipped 0.36 per cent to 7,138.26 points, driven down by the pound strengthening sharply against the dollar after a weaker-than-expected US jobs report was published today.

Much of the FTSE consists of export-focused firms, meaning a stronger pound tends to hit their sales. The currency rose 0.27 per cent against the greenback to buy $1.3867.

Market sentiment in London was also knocked after the latest IHS Markit PMI for the services sector came in at 55.0 for August, lower than analysts’ expectations.

Michael Hewson, chief market analyst at CMC Markets, said: “While there was an expectation that we might see a dip in US hiring in the August payrolls report, few people expected to see a sharp slowdown to 235k.”

“The disappointment over the jobs number has weighed on stock markets in the afternoon session, with European markets sliding back, having spent most of the day in positive territory.”

The mid-cap index followed its senior partner lower today, with the FTSE 250 down 0.24 per cent to 24,168.78 points, while AIM shares inched up 0.14 per cent to 1,309.34 points.

Winners and losers

Gains on the blue-chip index were led by industrial stocks, with the likes of miners Fresnillo, Polymetal and Glencore all up more than 1.20 per cent heading into the final hour of trading.

Aerospace defence company Melrose continued its ascent today, gaining 2.77 per cent to hit 189.35p.

Travel stocks lined the biggest fallers column. Notable fallers include British Airways parent company IAG sliding 2.43 per cent to 155.96p and aerospace engineer Rolls Royce down 2.01 per cent to 111.94p.

Middle class favourite, Ocado, was the worst performer of the day so far heading into the closing session, plunging 3.78 per cent to 2,011p.