U.S. Stocks Lacked Direction After Private Jobs Additions Slowed, Trade Deficit Expanded

Barry Adams
05 Apr, 2023
New York City

Benchmark indexes on Wall Street struggled to get traction after slower increase in private payrolls shifted focus to economic slowdown. 

Private sector payroll growth slowed in March, a second jobs report in as many days, suggesting that the multiple interest rate hikes may be finally having an impact on the tight labor market conditions. 

Treasury yields declined amid  the prospect of the Federal Reserve slowing its rate hike policy. 

Caution prevailed in trading and tech and energy stocks led the decliners. 

 

U.S. Trade Deficit Expanded In February 

The U.S. international trade deficit expanded in February, the Bureau of Economic Analysis reported Wednesday. 

Exports in February decreased 2.7% from the previous month to $251.2 billion and imports fell 1.5% to $321.7 billion, resulting in a trade deficit rise of 2.7% to $70.5 billion. 

The deficit with China increased $3.2 billion to $25.2 billion in February, driven by $1.4 billion decrease in exports to $13.1 billion and $1.8 billion increase in imports to $38.2 billion.

The surplus with Hong Kong increased $1.0 billion to $2.5 billion in February, driven by $1.0 billion increase in exports to $2.8 billion and less than $0.1 billion increase in exports to $0.3 billion.

 

Private Sector Job Growth Slowed In March 

U.S. private sector job growth slowed in March as consumer demand ebbed and rising interest rates began to bite following nine rate hikes over the last fourteen months. 

Private sector added 145,000 net new jobs following upwardly revised 261,000 in February.  

Service sector added 75,000 jobs and goods producing industries added 70,000 jobs in the month. 

 

U.S. Indexes & Yields 

The S&P 500  index fell 2.68 points to 4,097.92 and the Nasdaq Composite index declined 0.6% to 12,061.24.

The yield on 2-year Treasury notes decreased to 3.71%, 10-year Treasury notes edged lower to 3.31% and 30-year Treasury bonds to 3.58%. 

Crude oil decreased 18 cents to $80.21 a barrel and natural gas futures rose 8 cents to $2.18 a thermal unit. 

 

U.S. Stock Movers 

Johnson & Johnson increased 3.7% to $164.03 after the pharmaceutical company settled a lawsuit alleging the company's talc products caused cancer. 

Johnson & Johnson agreed to pay $8.9 billion over the next 25 years. 

The company's subsidiary LTL Management LLC refiled its voluntary Chapter 11 bankruptcy protection to obtain reorganization plan to pay global claimants. 

 The company agreed to pay a present value of up to $8.9 billion to pay for all current and future claims, a substantial increase from the $2 billion committed to the initial bankruptcy filing in October 2021. 

FedEx Corp increased 2.8% to $235.25 after the parcel delivery company increased its annual dividend by 10% to 44 cents to $5.04 a share in fiscal 2024.  

The delivery company estimated savings of at least $4.0 billion in fiscal year 2025 because of the reorganization plan that will include consolidation of different divisions and refocusing executive compensation packages.