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By Will Horner and Shen Hong
U.S. stock futures extended declines, setting major indexes up for their worst week since December, after data showed hiring growth slowed significantly in February.
S&P 500 futures were down 0.9% in recent trading, compared with a 0.5% decline ahead of the latest jobs report from the Labor Department. Changes in futures don't necessarily reflect moves after the opening bell.
Friday's data showed U.S. nonfarm payrolls rose a seasonally adjusted 20,000 in February, missing economists' expectations of 180,000 new jobs and reigniting concerns around the health of the U.S. economy.
Still, the report wasn't all gloomy. The unemployment rate ticked down to 3.8% from 4% a month earlier, while wages rose 3.4% from a year earlier -- the strongest pace since April 2009. The mixed data likely helped protect stocks against steeper losses, analysts said, adding that there was some question whether the government shutdown or a recent major snowstorm contributed to the weaker-than-expected jobs print.
"You can say this is not consistent with what we've seen from earnings," said Tony Roth, chief investment officer at Wilmington Trust.
Major U.S. indexes have been pummeled this week by concerns of weakening economic growth in Europe and Asia, on top of worries that a trade deal between the U.S. and China isn't imminent. Downbeat data from China overnight added to the sense of gloom.
A report Friday showed Chinese exports slid 20.7% in February from a year earlier -- a much steeper decline than economists had expected. Imports tumbled 5.2%, also a bigger drop than expected.
The data pushed shares of Chinese companies lower, with major indexes suffering their worst day since October. The Shanghai Composite Index fell 4.4% and its smaller Shenzhen counterpart dropped 3.8%, their biggest single-day drops in five months. Elsewhere in the region, Japan's Nikkei Stock Average closed 2% lower, while South Korea's Kospi lost 1.3%.
Meanwhile, in Europe, plans by the European Central Bank to deploy additional stimulus helped trigger losses overnight in U.S. and European stocks, since they suggested policy makers had become increasingly concerned about the slowdown across the region.
The ECB said Thursday it would hold interest rates months longer than initially signaled -- at least until the end of 2019 -- and issued a new batch of cheap long-term loans to banks starting in September. The central bank also slashed its forecast for gross domestic product growth for 2019 to 1.1% from 1.7% in December and cut its inflation projections.
Despite the concerned response from markets, some welcomed the actions taken by ECB President Mario Draghi as necessary to guard against a worsening of the global slowdown.
"It seems like Draghi, at least, wanted to be seen as decisive. Now is better to act, sooner, pre-emptive, rather than later," said Geoffrey Yu, head of the U.K. investment office of UBS Wealth Management.
While the ECB's moves showed they were concerned about the slowdown, their actions should be read as vigilance, rather than anxiety, he added. "They are erring on the side of caution."
Jim Reid, an analyst at Deutsche Bank, said in a note that markets interpreted the ECB's stimulus measures as "nowhere near substantial enough," considering the downward revisions of growth forecasts.
Investors in Europe were eyeing poor data from Germany that showed the nation's manufacturing orders plunged 2.6% in January from December, missing economists' forecasts of 0.5%.
Wall Street closed lower Thursday as growth worries and lingering questions over the U.S.-China trade dispute weighed on sentiment. The Dow and S&P 500 both closed down 0.8%.
European investors were taking the cocktail of bad news as a cue to move back into the safety of government bonds, as the yield on German bunds fell to 0.058%. The yield on the U.S. benchmark 10-year Treasury note inched up to 2.638% Friday from 2.637% late Thursday, according to Tradeweb. Yields move inversely to prices.
Michael Wursthorn contributed to this article.
Write to Shen Hong at email@example.com
(END) Dow Jones Newswires
March 08, 2019 09:34 ET (14:34 GMT)
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