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Stocks slump after report showing sharp drop in U.S. hiring
Fear, long absent in financial markets as investors bet on a soft landing for the U.S. economy, is back in the air on Wall Street.
Stocks opened sharply lower Friday after new government data showed a steep decline in hiring in July, spurring concerns that economic activity is slowing faster than economists expected.
Shortly after the start of trade, the blue-chip Dow Jones Industrial Average slid 461 points, or 1.1%, to 39,887. The broader S&P 500 sank 1.2%, while the tech-heavy Nasdaq Composite lost 2%, fueled by disappointing quarterly earnings from bellwethers such as Amazon and Intel.
Market analyst Adam Crisafulli of Vital Knowledge said the weak employment numbers will heighten fears the economy is losing steam. “This labor report fell short on pretty much every single metric,” he said in a note to investors.
Although stocks have hit record highs this year, propelled in part by excitement over artificial intelligence companies, investors have pulled back in recent weeks. Some analysts think the Federal Reserve has waited too long to lower interest rates, raising the risk of a “hard landing” for the economy or even a recession.
Economists also said signs that the job market is faltering makes it all but certain that the Fed will lower its benchmark rate in September in a move to ease borrowing costs and keep the economy from stalling.
The central bank could cut by as much as half a percentage point, or even look to dial back rates before its next policy meeting on September 17-18, according to investment advisory firm Capital Economics.
Despite the downshift in hiring, some analysts noted that the overall economy remains strong, pointing to an ongoing decline in inflation, healthy consumer spending and solid wage growth.
And while the nation’s unemployment rate has risen to 4.3%, up from 3.7% in January, that is largely because more people are looking for work rather than a spike in layoffs.
“Equities selling off should be seen as a normal reaction, especially considering the high valuations in many pockets of the market,” Lara Castleton, U.S. head of portfolio construction and strategy at Janus Henderson Investors, said of the July job numbers. “It’s a good reminder for investors to focus on the earnings of companies going forward.”
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Washington — The Senate on Friday confirmed President Biden’s 234th nominee to the federal judiciary, matching the number of judges approved for lifetime appointment to the nation’s courts during President-elect Donald Trump’s first term.
The confirmation of Benjamin Cheeks to the federal district court in Southern California by a 49 to 47 vote led Mr. Biden to tie the number of his predecessor’s judicial appointments. The president is on track to surpass Trump’s confirmations to the federal bench before the year’s end, with the Senate teeing up the nomination of Serena Murillo to the federal district court in Central California.
As he nears the end of his presidency, Mr. Biden will close out his four years in office having appointed one Supreme Court justice, 45 judges to the federal appeals courts, 186 to the district courts and two to the Court of International Trade. His selection of Justice Ketanji Brown Jackson made history, since she is the first Black woman to serve on the nation’s highest court.
Mr. Biden has also selected a record number of public defenders to serve as federal judges on the appeals courts, and his nominees are the most diverse compared to those tapped by his predecessors.
There’s been heightened focus on the judiciary by presidents in recent years as gridlock in Congress has led to unilateral executive actions on a variety of issues touching on American life. But often those efforts give way to legal challenges, leaving courts as the final deciders in disputes over hot-button policies.
While Mr. Biden will likely end his presidency with more judicial appointments than Trump, he did not see the same level of success as his predecessor in putting his stamp on the Supreme Court. Jackson replaced Justice Stephen Breyer, a member of the court’s liberal wing, following his retirement in 2022.
But Trump named three justices to the high court, Justices Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett. Barrett replaced the late Justice Ruth Bader Ginsburg, a liberal member, which locked in a 6-3 conservative supermajority.
Mr. Biden also trails Trump in appointments to the 13 courts of appeals, ending his presidency with 45 judges approved to those courts, compared to Trump’s 54.
But Trump had an advantage when he took office in 2017, inheriting 17 appellate court vacancies after the Republican-led Senate blocked then-President Barack Obama’s nominees in the last two years of his term. When Mr. Biden started his presidency, there were just two open seats on the courts of appeals.
With a second Trump term on the horizon, some judges who announced their plans to retire have reversed course as it became clear their replacements wouldn’t be confirmed before Jan. 3, when Republicans will assume control of the Senate.
Judge James Wynn of the 4th Circuit notified Mr. Biden last week that he would no longer assume senior status, a form of semi-retirement, and the White House withdrew the nomination of his possible successor, North Carolina Solicitor General Ryan Park.
North Carolina’s Republican senators, Thom Tillis and Ted Budd, opposed Park’s nomination, and Tillis lambasted Wynn’s decision to walk back his retirement, calling it “brazenly partisan” and driven by Trump’s election.
Two district court judges appointed by Democratic presidents, Judges Max Cogburn and Algenon Marbley, also rescinded their plans to take senior status following Trump’s victory, according to Reuters.
The reversals come after Senate Democrats reached a deal with Republicans to allow for swifter consideration of Mr. Biden’s district court picks. GOP senators — with Trump’s backing — had been working to slow the pace of judicial confirmations during the lame-duck session, but under the deal, they would forego procedural roadblocks on district court nominees if Democrats would not bring four remaining appellate court nominations up for a vote.
There will be four current or future vacancies on the courts of appeals for Trump to fill after he takes office and more than 30 on the district courts, according to the Administrative Office of the U.S. Courts.
Between 60 and 80 people are injured Friday after a car crashed into a Christmas market in the eastern German city of Magdeburg, a spokesman for the local rescue service told AFP.
According to the emergency service, several people were “severely” injured, the spokesman said. German media reported one person had died, although that was not yet confirmed by authorities.
This is a developing story. Please check back for updates.