US open: Stocks edge lower after non-farm payrolls report

US stocks edged lower as investors digested the non-farm payrolls report, which was weaker than expected but still showed fairly steady job growth, underpinning expectations of a September rate hike by the Federal Reserve.

At 1545 BST, the Dow Jones Industrial Average was down 0.5%, while the S&P 500 and the Nasdaq were down 0.4%.

Friday data

Data from the Labor Department showed US employers added 215,000 jobs in July, missing the consensus forecast of 225,000. It also came in below the monthly average gain of 246,000 for the previous 12 months. The unemployment rate, meanwhile, was unchanged at 5.3%.

The Labor Department said the job gains in July were mainly in retail trade, health care, professional and technical services, and financial activities.

Although the figures were a slight miss against consensus, Dennis de Jong, managing director at UFX.com, said the jobs market has improved, giving the Federal Reserve reason to lift interest rates for the first time in nine years. “Today’s figure has given (Fed Chair) Janet Yellen and her Fed colleagues the ammunition to pull the trigger on an interest rate rise next month, and they aren’t likely to hold back," he said.

“The US economy remains in a healthy state and, although there are economic threats around the world, the time is right for a first rate hike in nine years. Other economies are likely to follow suit over the next few months as we get back towards a semblance of economic normality.”

Meanwhile, Chris Williamson, chief economist at Markit, said that while it was not by any means a done deal, the report “does nothing to discourage the belief that a September hike is very much on the table.”

The dollar gained ground against the euro and the pound and hit a two-month high against the yen, boosted by heightened expectations of a September rate hike.

Gold lost its shine after the jobs report, with futures for December delivery down 0.5% to $1,084 an ounce. Oil prices also fell, with West Texas Intermediate down 1.2% to $44.13 a barrel and Brent 1.5% lower at $48.77 a barrel. Most commodities are priced in dollars so when the greenback appreciates, oil and gold become more expensive for holders of other currencies.

Earnings in focus

Groupon shares fell into the red as the company swung to a profit in the three months ending 30 September, but cautioned that earnings for the current quarter would miss expectations.

Auctioneer Sotheby’s was also on the back foot after it posted lower-than-expected second-quarter profit due to a change in the sales calendar and a loss on a painting sold in the period.

Bucking the trend, Nvidia Corp, which makes graphics chips, surged over 10% after it posted better-than-expected second-quarter results late on Thursday.