U.S. stocks finished lower Friday, and the Nasdaq Composite booked its worst week since February, capping a gainly stretch of trading for equity benchmarks in the first week of trading in 2022.
Investors parsed two big pieces of news for the week that resulted in sizable swings. Friday’s move followed a monthly employment report that, on its face, came in weaker than expected.
The Labor Department report for December showed that the U.S. added 199,000 jobs, well below the forecast from economists polled by The Wall Street Journal for a 422,000 rise for the month, highlighting some impact of the spread of omicron on the jobs market.
However, investors also saw glimmers of strength in the labor-market reading that might not dissuade the Fed from following through with its policy plans. The unemployment rate, for example, slipped to 3.9% from 4.2%.
Earlier in the week, minutes of the Fed’s December policy meeting, released Wednesday, showed that officials felt it might be necessary “to increase the federal-funds rate sooner or at a faster pace than participants had earlier anticipated.” The summary also showed that Fed officials had a wide-ranging discussion of how to move away from their current easy stance by hiking rates and shrinking the central bank’s balance sheet.
The Dow Jones Industrial Average
DJIA,
fell 5 points, or less than 0.1%, to around 36,231; the S&P 500 index
SPX,
declined 0.4% to reach 4,677, while the Nasdaq Composite Index
COMP,
fell 1% to 14,935.
For the week, the Nasdaq Composite declined 4.6% to mark its sharpest weekly slide since Feb. 26. The S&P 500 index declined 1.9% for its worst week since Dec. 17, while the Dow finished with a more modest 0.3% weekly fall.
A jump in yields, with investors anticipating higher interest rates, put pressure on rate-sensitive sectors like technology and growth-oriented assets.
Indeed, the yield on the 10-year Treasury note BX:TMUBMUSD10Y rose 3.6 basis points, to 1.769%, up from 1.733% at 3 p.m. Eastern on Thursday. It rose 27.3 basis points this week for the biggest weekly gain since the period that ended Sept. 13, 2019, according to Dow Jones Market Data.
