Strong Labor Market Recovery In July Lifted Bond Yields, Stocks Meander

Barry Adams
05 Aug, 2022
New York City

Stocks on Wall Street traded lower after stronger-than-expected jobs report shifted the focus to the next rate hike amount. 

July payrolls increased 528,000 following the 372,000 additions in June, the Bureau of Labor Statistics said Friday. 

The unemployment rate declined to 3.5%. 

Both the non-farm employment and jobless rates have returned to their February 2020 pre-pandemic level. 

The sharp accelerations in payroll additions surprised many economists who were looking for the increase of less than 265,000 according to an informal survey of six economists conducted by Ticker.com. 

Investors worried that the larger-than-expected payrolls gains despite the slowing economic backdrop may support the Federal Reserve's case for raising rates at a faster pace at its next meeting. 

The latest labor market data will certainly encourage the policymakers to lift rate by as much as 75 basis points at its next two-day meeting ending on September 21. 

The yield on 10-year U.S. Treasury notes shot up to 2.85% and 2-year notes jumped to 3.255%. 

The S&P 500 index fell 0.7% to 4,123.42 and the Nasdaq Composite declined 1.1% to 12,588.30. 

Expedia Group fell 1.1% to 101.02 and the online travel booking platform operator reported stronger-than-expected revenues and earnings in its latest quarterly report. 

Gross bookings soared 26% to $26.1 billion as travel demand further improved on higher demand for lodging, air and other products. 

Bookings for hotels soared 57% from a year ago and 8% higher than in the second quarter of 2019, the previous peak.

Second quarter revenues increased 51% to $3.2 billion and net loss shrank to $185 million from $301 million a year ago. 

DoorDash increased 1.1% to $82.30 after the delivery company reported revenues in the second quarter increased 30% to $1.6 billion and total orders rose 23% to 426 million. 

Net loss surged to $263 million from $102 million a year ago 

Lyft Inc soared 14.5% to $19.92 after the ride-hailing company reported second quarter revenues jumped 30% from a year agon and 19% from the previous month to $990.7 million. 

Net loss in the quarter rose to $377.2 million from $251.9 million a year ago. 

Active riders in the second quarter increased 15.9% to 19,8 million and revenue per active rider jumped 11.8% to $49.89.