US STOCKS-Wall St slides as strong jobs data fuels rate hike worries

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By Amruta Khandekar and Bansari Mayur Kamdar

July 8 (Reuters) – Wall Street’s main indexes slipped on Friday after stronger-than-expected jobs data fueled expectations of another big interest rate hike by the U.S. Federal Reserve later this month.

The Labor Department’s report showed nonfarm payrolls rose by 372,000 jobs in June, higher than the estimated rise of 268,000 jobs, according to a Reuters poll of economists. nL1N2YO2M6

The report also showed jobless rate remained near pre-pandemic lows at 3.6% and average hourly earnings rose 0.3%, after gaining 0.4% in May, all pointing to strength in the labor market.

“Certainly, it solidifies the view that there’s going to be a 75-basis-point increase in the next two weeks,” said Tom Plumb, portfolio manager of the Plumb Balanced Fund.

“We are still where bad news is good news and good news is bad news … that’s going to be the case until there’s some perception that the Fed has accomplished or is accomplishing their goal of moderating the growth of the economy.”

Atlanta Fed President Raphael Bostic, until recently among the central bank’s most dovish policymakers, said on Friday he “fully” supports another 75 basis point rate rise later this month. nL1N2YP147

Fed Governor Christopher Waller and St. Louis Fed President James Bullard said on Thursday they would support another 75-basis-point rate increase, but forecast a downshift to a slower pace afterward. nL1N2YO24C

After a brutal first half of the year, U.S. stock markets started July on a solid footing as investors took relief from easing commodity prices and the Fed hinting at a more tempered program of rate hikes amid concerns of a recession. nL1N2YN1SA

The S&P 500 .SPX and the Nasdaq .IXIC recorded their fourth successive higher close on Thursday, while the three main indexes were on track to post weekly gains.

Rate-sensitive shares of high-growth companies such as Microsoft Corp MSFT.O, Amazon.com Inc AMZN.O and Nvidia Corp NVDA.O fell nearly 1% as U.S. Treasury yields jumped. US/

At 09:48 a.m. ET, the Dow Jones Industrial Average .DJI was down 68.69 points, or 0.22%, at 31,315.86, the S&P 500 .SPX was down 18.45 points, or 0.47%, at 3,884.17, and the Nasdaq Composite .IXIC was down 87.57 points, or 0.75%, at 11,533.78.

Levi Strauss LEVI.N rose 2.1% after the company’s second-quarter results beat estimates, helped by strong demand for its denim jeans and jackets. nL4N2YO38H

Twitter Inc TWTR.N fell 4.6% after a report said Elon Musk’s deal to buy the social media company is in “serious jeopardy”. nL4N2YP24Y

GameStop Corp GME.N tumbled 7.5% after the video game retailer said it had terminated the employment of Chief Financial Officer Michael Recupero. nL4N2YO39J

Declining issues outnumbered advancers for a 2.00-to-1 ratio on the NYSE and a 1.52-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 29 new lows, while the Nasdaq recorded eight new highs and 11 new lows.

(Reporting by Amruta Khandekar and Bansari Mayur Kamdar in Bengaluru; Editing by Shounak Dasgupta)

((Amruta.Khandekar@thomsonreuters.com))