[BRIEFING.COM] Friday's stock market spent the session in the red. The January employment report fanned inflation fears and rate hike worries, and a disappointing fourth quarter earnings report from Amazon.com (AMZN 38.29 -4.45) contributed to the market's struggle. In addition, a spike in the price of crude weighed upon sentiment.
The hourly earnings component of the jobs data received the most attention. Hourly earnings rose a slightly more than expected 0.4% in January, and the December figure was revised to 0.4% from the originally reported 0.3%. The data suggest a firming wage trend, and a lower than expected unemployment rate of 4.7% underpinned concerns over a tight labor market. The hourly earnings trend heightened inflation fears, and fed the argument that the Fed may continue raising interest rates. For its part, Briefing.com expects a 25 basis point hike at the FOMC's March meeting. On the heels of the Fed's ambiguous policy directive, today's data spurred further uncertainty that gave investors reason to anticipate even further monetary tightening. The other closely-watched element, non-farm payrolls, rose a less than expected but very solid 193K. When also taking into account the upward revision to the December data, the payroll change was consistent with expectations for approximately 3.5% real GDP growth during the first quarter.
Selling pressure was broad-based and left all but one economic sector with a loss. Rate-sensitive areas were especially affected by the jobs data, but a recovery in the Treasury market helped them move off of their lows. A rally in 30-year bonds, ahead of next week's auction and anticipation of decent foreign demand helped that market gain ground after its early sell-off. Bonds were also aided by the ISM index, which reflected lower than expected growth.
The Technology and Energy sectors were the worst faring. Crude futures closed 1.1% higher, at $65.37 per barrel, as concerns over Iran's nuclear ambitions continue to affect the energy market. The Energy sector did not catch a bid from the crude action, and levied a weighty 1.1% loss. Amazon.com dragged the Technology sector 1.1% lower. Failing to meet the street's high expectations, the company joined the likes of Yahoo (YHOO 33.48 -0.77), eBay (EBAY 40.41 -1.17), and Google (GOOG 383.00 -13.04) last night. Internet related issues were particularly weak, but selling was wide-spread and left a majority of the S&P 500's tech stocks trending lower. The semiconductors and computer hardware industries were also areas of significant weakness.
Telecom was today's lone bright spot, but its 0.4% advance did little to counter the declines across the broader marke
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