U.S. Stocks Sink Ahead of Jobs Report

Barry Adams
01 Sep, 2022
New York City

Stocks continued their downward slide for the fifth day in a row and bond yields rose to a 10-week highs not seen since 2007. 

Benchmark index extended losses ahead of the jobs report on Friday and on the ongoing worries of the future rate hikes. 

Investors are looking for clues on the health of the jobs market, consumer spending and energy prices. 

So far, consumer spending has remained stable but the spending pattern is shifting and amid high energy and food price inflation many are limiting purchases to basic and necessary items. 

However, if interest rates continue to rise and energy prices remain elevated, job market conditions are likely to turn unfavorable and economic growth will slow down further. 

Weekly initial jobless claims declined to 232,000 for the week ending on August 27 and continuing claims increased 26,000 from the previous week to 1,44 million, the Labor Department reported Thursday.  

 A separate report from the labor department showed that unit labor costs rose 10.2% in the second quarter from the previous three-month period. 

On an annual basis, unit labor cost rose 9.3% at the end of the second quarter. 

The S&P 500 index declined 1.3% to 3,906.45 and the Nasdaq Composite fell 1.9% to 11,585.91. 

Futures of crude oil prices declined $1.16 to $88.41 and natural gas rose 16 cents to $9.29 a thermal unit.

Bond yields rose to a two-month high ahead of highly anticipated jobs report on Friday 

The yield on 10-year Treasury notes rose to 3.28% and on 2-year Treasury notes inched up to 3.52%. 

Ciena Corp declined 9% to $45.97 after the networking equipment maker reported weaker-than-expected quarterly results.

In addition, the company said parts shortages are preventing the company from meeting its customer demands. 

Lands' End, Inc declined 14% to $11.87 after the apparel retailer said quarterly loss narrowed but expenses and inventories rose.   

For the second quarter, net revenue fell 8.6% to $351.2 million from $384.1 million a year ago. 

The company swung to a net loss of $2.2 million or 7 cents a diluted share compared to net income of $16.2 million or 48 cents a diluted share last year. 

For fiscal 2022, the apparel retailer guided revenue to be between $1.60 billion and $1.64 billion and net income between $16.5 million and $23.5 million, and diluted earnings per share between $0.49 and $0.70.

Signet Jewelers Ltd dropped 11.4% to $57.29 despite the retailer reaffirming its full-year outlook and exceeding quarterly earnings estimates. 

Total sales declined 1.9% to $1.8 billion and same store sales fell 8.2% from a year ago. 

Diluted earnings per share declined to $2.58 from $3.60 a year ago. 

Signet reaffirmed its full-year fiscal 2023 annual revenues to fall between $7.6 billion and $7.7 billion and diluted earnings per share between $10.98 and $11.57.