The S&P 500 ends slightly lower after the jobs report

NEW YORK, Dec 2 (Reuters) – The S&P 500 closed slightly lower on Friday, although major indexes recovered from their worst levels of the day, as the November payrolls report fueled expectations that the Federal Reserve would maintain its rate hike path to fight inflation.

The Labor Department’s jobs report showed that nonfarm payrolls rose by 263,000, beating expectations for 200,000 and wage growth accelerating even as recession worries mount.

As expected, the US unemployment rate remained unchanged at 3.7%.

“Wage growth has been on an upward trend since August,” said Brian Jacobsen, senior investment strategist at Allspring Global Investment in Menomonee Falls, Wisconsin.

“We need to see this trend reverse for the Fed to be comfortable with a pause. Until then, they will continue to taper toward a pause.”

Investors have been looking for signs of weakness in the labor market, especially wages, as a precursor to faster cooling in inflation that would allow the Fed to slow and eventually halt its current rate-hiking cycle.

Shares had risen earlier in the week following Fed Chair Jerome Powell’s comments about tapering rate hikes as early as December.

The Dow Jones Industrial Average (.DJI) rose 34.87 points, or 0.1%, to 34,429.88, the S&P 500 (.SPX) lost 4.87 points, or 0.12%, to 4,071.7 and The Nasdaq Composite (.IXIC.9) fell .20IC. 0.18% to 11,461.50.

Still, stocks ended the session off their lows for the day that sent each of the major indexes down at least 1%, with the Dow managing a small gain.

“If anything, I’m actually encouraged by how the market is climbing back from the level we were at today. It’s another indication that the market is looking for at least a seasonal December rally,” said Sam Stovall, investment strategist at CFRA in New York.

“The market is starting to look across the valley and say, ‘OK, a year from now the Fed will probably be on hold and consider cutting interest rates’.”

The rate-setting Federal Open Market Committee will meet on 13-14 December, the last meeting in a volatile year in which the central bank tried to curb the fastest rate of inflation since the 1980s with record interest rate hikes.

The major averages posted a second straight week of gains, with the S&P 500 climbing 1.13%, the Dow up 0.24% and the Nasdaq up 2.1%.

Growth and technology companies such as Apple Inc ( AAPL.O ), down 0.34%, and Amazon ( AMZN.O ), down 1.43%, were pressured by worries over rising interest rates, but pared declines as U.S. Treasury yields fell through the previous day. heights. The S&P 500 Growth Index (.IGX) fell 0.29% while technology stocks (.SPLRCT) were among the worst performers among the 11 major S&P 500 sectors, down 0.55%.

Ford Motor Co ( FN ) fell 1.56% on lower November car sales, while DoorDash Inc ( DASH.N ) fell 3.38% after RBC downgraded the food delivery firm’s shares.

Advances outnumbered decliners on the NYSE by a ratio of 1.15 to 1; on the Nasdaq, a ratio of 1.35 to 1 favored advances.

S&P 500 posted 20 new 52-week highs and no new lows; The Nasdaq Composite recorded 86 new highs and 92 new lows.

Reporting by Chuck Mikolajczak; Editing by Cynthia Osterman

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