US close: Stocks fall despite better-than-expected jobs data

US stocks were in the red by the close on Thursday, as investors continued to digest hawkish minutes from the Federal Reserve and sifted through a number of labour market reports.

The Dow Jones Industrial Average ended the session down 1.02% at 32,930.08, as the S&P 500 lost 1.16% to 3,808.10 and the Nasdaq Composite was off 1.47% at 10,305.24.

“US markets have slipped back after the latest ADP employment numbers and weekly jobless claims came in better than expected,” said CMC Markets chief market analyst Michael Hewson.

“The resilience of these numbers has lent support to the idea that we will probably see the Fed hike rates by another 50-basis points at the start of February pushing the funds rate up to 5%.

“Despite today’s resilience in the jobs data, we’ve seen further announcements of job losses in the tech sector, although they remain small when compared to their hiring seen since the start of the pandemic.”

In economic news, unemployment claims were stronger than expected in the US during the final week of 2022, reflecting lower layoffs and only slightly decreased hiring over holidays.

According to the US Department of Labor, initial jobless claims fell by a seasonally-adjusted 19,000 to 204,000 over the week ended 31 December.

Economists had been expecting a reading of 223,000.

Private sector employment in the US rose more than expected in December, however, according to the latest data from ADP.

Employment increased by 235,000 from November, versus expectations for a 150,000 jump, with the figures also showing that annual pay was up 7.3% on the year.

Small businesses with fewer than 50 employees added 195,000 jobs, while medium businesses with between 50 and 499 employees added 191,000 jobs.

Large businesses with more than 500 employees shed 151,000 jobs.

Still on data, US job cut announcements fell at the end of 2022 closing off a year that saw the second-lowest total tally since 1993, according to a closely-followed employment survey.

Challenger, Gray and Christmas said lay-off announcements dropped by 43% month-on-month in December to reach 43,651.

In the same month one year earlier they rose by 19,000.

On the corporate front, Amazon fell 2.37% after the e-commerce and cloud computing giant said it would axe 18,000 jobs in a bid to cut costs.

“The biggest reduction in Amazon’s workforce in its history is worth keeping in perspective for several reasons,” said Russ Mould, investment director at AJ Bell.

“While 18,000 job cuts sound like a lot, in the context of a workforce of more than 1.5 million it is a drop in the ocean.

“It’s also important to consider where the cuts are being made - they are mostly in areas like human resources as well as its Amazon Go and Amazon Fresh physical stores, and the latter represent something of an experiment for the company.”

Mould said Amazon often “tested the waters” in different markets, but probably felt that in the current climate, its focus should be on core e-commerce and Amazon Web Services cloud operations.

“Still, these job cuts represent a significant increase on previously outlined levels.

“It shows Amazon is taking the current economic challenges seriously.

“As is often the case, the news was pleasing to shareholders who will prize any efficiencies which can increase their slice of the returns generated by the business.”

Elsewhere, transatlantic pharmacy giant Walgreens Boots Alliance tumbled 6.13% after it reported a first quarter loss of $4.31, swinging from earnings of $4.13 per share year-on-year.

The Nasdaq-traded company said that reflected a $6.5bn pre-tax charge in connection with its previously-announced opioid litigation settlement, and other “opioid-related” matters.

It said adjusted earnings per share decreased 30.8% to $1.16, or by 29.9% on a constant currency basis, against “strong growth” of 53.1% in the year-ago quarter, reflecting higher Covid-19 vaccine volumes at the time.

That was, however, still better than the $1.14 adjusted earnings per share analysts had pencilled in.

First quarter sales decreased 1.55% year-on-year to $33.4bn, but was up 1.1% on a constant currency basis, and was well ahead of the $32.9bn markets were expecting.

Reporting by Josh White for Sharecast.com. Additional reporting by Michele Maatouk.

Dow Jones - Risers

Chevron Corp. (CVX) $175.24 1.80%
Merck & Co. Inc. (MRK) $113.64 1.39%
Verizon Communications Inc. (VZ) $41.70 1.39%
Dow Chemical Co. (DOW) $52.91 1.11%
Amgen Inc. (AMGN) $266.86 0.93%
Boeing Co. (BA) $204.99 0.66%
Travelers Company Inc. (TRV) $187.60 0.17%
Honeywell International Inc. (HON) $0.00 0.00%
Dowdupont Inc. (DWDP) $0.00 0.00%
Walt Disney Co. (DIS) $91.92 -0.07%

Dow Jones - Fallers

Walgreens Boots Alliance, Inc. (WBA) $35.19 -6.13%
Microsoft Corp. (MSFT) $222.31 -2.96%
Unitedhealth Group Inc. (UNH) $489.96 -2.88%
American Express Co. (AXP) $146.43 -2.73%
Salesforce.Com Inc. (CRM) $136.34 -2.33%
3M Co. (MMM) $122.71 -1.75%
Cisco Systems Inc. (CSCO) $46.88 -1.41%
Home Depot Inc. (HD) $315.47 -1.33%
Procter & Gamble Co. (PG) $150.34 -1.24%
Coca-Cola Co. (KO) $62.20 -1.14%

S&P 500 - Risers

Lamb Weston Holdings, Inc. (LW) $96.03 9.77%
Western Digital Corp. (WDC) $35.23 6.60%
Valero Energy Corp. (VLO) $126.51 5.83%
Mattel Inc. (MAT) $19.28 4.78%
Marathon Petroleum Corporation (MPC) $115.73 4.66%
United Airlines Holdings Inc (UAL) $41.24 3.83%
ConAgra Brands Inc (CAG) $39.97 3.42%
Mosaic Company (MOS) $44.69 3.28%
Hess Corp. (HES) $140.78 3.08%
ConocoPhillips (COP) $116.77 3.03%

S&P 500 - Fallers

Constellation Brands Inc. Class A (STZ) $208.68 -9.72%
Sherwin-Williams Co. (SHW) $227.43 -6.73%
Walgreens Boots Alliance, Inc. (WBA) $35.19 -6.13%
Digital Realty Trust (DLR) $98.08 -5.37%
PPG Industries Inc. (PPG) $123.11 -5.28%
AES Corp. (AES) $25.87 -5.17%
Entergy Corp. (ETR) $103.66 -5.08%
Ansys Inc. (ANSS) $231.65 -4.65%
Essex Prty Trust Inc. (ESS) $205.88 -4.35%
Danaher Corp. (DHR) $255.23 -4.18%

Nasdaq 100 - Risers

Western Digital Corp. (WDC) $35.23 6.60%
T-Mobile Us, Inc. (TMUS) $144.48 3.23%
American Airlines Group (AAL) $13.99 2.94%
Mercadolibre Inc. (MELI) $856.09 2.23%
Expedia Group Inc. (EXPE) $93.00 2.21%
Charter Communications Inc. (CHTR) $361.43 2.10%
Hasbro Inc (HAS) $63.30 1.92%
Seagate Technology Plc (STX) $53.49 1.91%
Booking Holdings Inc. (BKNG) $2,144.94 1.63%
Dollar Tree Inc (DLTR) $142.56 1.45%

Nasdaq 100 - Fallers

Workday, Inc. (WDAY) $160.19 -6.44%
Walgreens Boots Alliance, Inc. (WBA) $35.19 -6.13%
Intuit Inc. (INTU) $375.62 -4.07%
Adobe Systems Inc. (ADBE) $328.44 -3.80%
Analog Devices Inc. (ADI) $159.69 -3.75%
Gen Digital Inc. (GEN) $21.10 -3.52%
Fastenal Co. (FAST) $46.30 -3.48%
J.B. Hunt Transport Services Inc. (JBHT) $169.20 -3.30%
Nvidia Corp. (NVDA) $142.65 -3.28%
Autodesk Inc. (ADSK) $182.07 -3.13%