Major Averages Ease Ahead of Rate Hike, Private Sector Job Growth Expands

Barry Adams
02 Nov, 2022
New York City

Stocks on Wall Street edged lower ahead of the rate decision later in the day and bond yields held steady. 

The Federal Reserve is widely expected to lift rates by 75 basis points, the fourth large-sized increase in a row. Investors are looking for more clues on the health of the economy and future rate direction. 

Global markets were on hold ahead of the Fed' move and the yen jumped after the Bank of Japan hinted at a policy shift. 

The slow depreciation of the yen has been worrying the Bank of Japan and finance ministry as higher import bills fuel inflation. 

Japan spent $43 billion between September 29 and October 27 in arresting a rapid decline in the yen, Japan's Finance Minister Shunichi Suzuki said Wednesday. 

Despite the foreign exchange market intervention, the yen has declined because of the Bank of Japan's ultra-low interest rate policy, diverging from the rate increase policy of the U.S. Federal Reserve. 

The S&P 500 index declined 0.6% to 3,831.47 and the Nasdaq Composite index dropped 0.7% to 10,814.46. 

Crude oil declined 30 cents to $88.02 a barrel and natural gas rose 33 cents to $6.06 a thermal unit. 

The yield on 2-year Treasury notes held at 4.54%, 10-year Treasury notes was unchanged at 4.04% and 30-year bonds traded down at 4.10%. 

 

Service Sector Drives Private Sector Job Growth In October 

Private sector payrolls expanded in October, reflecting labor market strength, according to the ADP survey. 

Companies added 239,000 jobs in October from the revised 192,000 positions in September. 

overall wages rose 7.7% in October from a year ago but fell 0.1% from the previous month. 

Service sector jobs increased 247,000 but goods producing companies trimmed 8,000 jobs in October. Hospitality, travel and entertainment companies led the increase with 210,000 additions. 

 

U.S. Stock Movers 

Airbnb declined 8.3% to $100.01 after the online accommodation booking platform reported better-than-expected quarterly results. 

Revenue in the third quarter jumped 29% to $2.9 billion and net income soared 46% to $1.2 billion. 

The company said gross booking jumped 31% to $15.6 billion on higher average daily rate and an increase in nights booked.  

Nights and experiences booked rose 25% to 99.7 million from a year ago, driven by all regions but cancellation rates rose to the pre-pandemic 2019 levels. 

Advanced Micro Devices jumped 3.5% to $61.74 after the semiconductor chip maker reported better-than-expected quarterly results. 

Revenue in the third quarter increased 29% to $5.6 billion from $4.3 billion a year ago. 

Net income plunged 93% to $66 million from $923 million and diluted earnings per share dropped to 4 cents from 75 cents a year ago.