The jobless rate held steady at 5.1 percent but average hourly wages fell by a cent from August.
FED: The report raised doubts that the Fed will start raising interest rates before the end of the year.
Considering that the Fed’s John Williams said yesterday that a payrolls number “above 100,000 or 150,000 would be good for me” when it comes to a rate hike, it calls into question not only whether the Fed can raise rates, but the strength of the US economy overall.
A small hike in rates would be a vote of confidence in the economy and help calm volatile equity markets.
Investors initially fled risky assets, such as equities and piled into Treasurys (http://www.marketwatch.com/story/treasury-yields-rise-on-strong-private-payrolls-ahead-of-official-jobs-report-2015-09-30)and gold (http://www.marketwatch.com/story/gold-vault-higher-after-jobs-report-disappoints-2015-10-02), however, both those assets retreated from highs as <strong>stocksstrong> rebounded. Additionally, Fed Vice Chair Stanley Fischer said there are no “acute risks” now threatening financial stability.
At 10:27 a.m. ET, the Dow Jones industrial average was down 204.57 points, or 1.26 percent, at 16,067.44, the S&P 500 was down 23.87 points, or 1.24 percent, at 1,899.95 and the Nasdaq composite was down 54.70 points, or 1.18 percent, at 4,572.39. Higher rates mean that banks can charge borrowers more on everything from home mortgages to auto loans, thereby boosting their revenue. JPMorgan Chase fell $1.45, or 2 percent, to $59.54, and Bank of America fell 52 cents, or 3 percent, to $15.02.
Banks and other financial stocks were the only sector to fall.
Declining issues outnumbered advancing ones on the NYSE by 2,119 to 771. On the Nasdaq, 1,563 issues fell and 1,083 advanced. The department-store chain gained $1.35, or 2 percent, to $72.76.
Volkswagen was among the worst-performing stocks in Europe, down 5.4 percent near four-year lows as concern intensified over the fallout from the company rigging emissions tests in the United States.
The dollar fell against the yen and the euro as traders expected USA interest rates to remain low.
JPM, -0.28% sunk 3.6%, while Goldman Sachs Group GS, +0.56% dropped about 3%, contributing a combined 50 points to the blue-chip benchmark’s 183-point tumble in early Friday trade. For the week, it dropped 0.9 percent, falling for the third straight week.
The rate on the benchmark 10-year U.S. Treasury note dipped below 2% for the first time since the market panic of August 24. The S&P 500 Index (SPX – 1,951.36) closed in the black as well, picking up 27.5 points, or 1.4%.