U.S. stocks fell in afternoon trading Thursday following the release of a mixed report on the U.S. job market and news that Greek finances are deteriorating. Investors drove bond prices up in a bet that the Federal Reserve will be in no hurry to raise interest rates as wage growth stalled and many people gave up looking for work.
The markets were closed Friday for the Fourth of July holiday.
KEEPING SCORE: The Dow Jones industrial average fell 60 points, or 0.3 percent, to 17,698 as of 2:18 p.m. Eastern time. The Standard & Poor’s 500 index dropped nearly six points, or 0.3 percent, to 2,071. The Nasdaq composite fell 17 points, or 0.4 percent, to 4,995.
MORE JOBS: Despite weaknesses in the U.S. labor market, overall payrolls grew by 223,000 jobs in June and the unemployment rate fell to a seven-year low of 5.3 percent. But the rate declined mostly because many people abandoned their job hunts and were no longer counted as unemployed. The report also said average hourly earnings rose 2 percent, slightly lower than consensus.
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BOND BUYING: Investors bought bonds in anticipation that inflation, and interest rates, will remain low. The price of the benchmark 10-year Treasury note rose, pushing down its yield to 2.37 percent from 2.45 percent just before the jobs report came out.
ANALYST'S TAKE: “There is no wage pressure and therefore no inflationary pressure. The Fed should just let the economy run,” said Steven Ricchiuto, chief economist at Mizuho Securities. “Maybe instead of hiking rates in September, maybe it'll be in December, maybe March.”
GREEK WOES: A report from the International Monetary Fund said Greece needs 50 billion euros ($56 billion) in new financing from October through 2018, and more debt relief. The analysis was made before Greece closed its banks and defaulted on IMF loans earlier this week. The outlook is worse now.
Greece’s government plans to put austerity measures to voters on Sunday after European creditors rejected its latest proposal for a new aid program.
MERGER NEWS: Health Net rose $5.96 or 9 percent, to $71.02 after Medicaid coverage provider Centene said it will pay about $6.3 billion to buy the company. The deal is more evidence of managed-care companies looking to bulk up in response to the federal overhaul of health care.
GUSHER: U.S.-listed shares of BP rose $1.90, or 5 percent, to $41.18 after the oil driller reached an $18.7 billion settlement with several states to resolve litigation over the 2010 Gulf of Mexico oil spill.
EUROPEAN STOCKS: Germany’s DAX fell 0.7 percent and France’s CAC 40 dropped 1 percent. Britain’s FTSE 100 rose 0.3 percent.
ASIA'S DAY: Japan’s Nikkei 225 rose 1 percent. Hong Kong’s Hang Seng gained 0.1 percent and China’s Shanghai Composite slumped 3.5 percent.