The S&P 500 index fell 1.2% last week, with communication services leading a broad drop, amid worries about the COVID-19 Omicron variant and data showing a slowdown in US hiring last month.
The week’s declines heading into Friday’s session came as new cases of the Omicron variant were reported in a number of countries including the US. Some countries resumed restrictions, prompting more worries about the potential economic impact of the variant, which has many mutations and was designated last week by the World Health Organization as a variant of concern. It isn’t yet known how well existing vaccines are able to neutralize the variant.
Friday, stocks fell further — with the S&P 500 logging a 0.8% drop for the day — as the US Labor Department reported November nonfarm payrolls rose by 210,000, well below the 550,000 jobs increase that was expected in a survey compiled by Bloomberg. October payrolls had a small upward revision to a 546,000 increase.
Still, the data also showed the unemployment rate fell to 4.2% in November from 4.6% in October, compared with the 4.5% rate expected, while the labor force participation rate rose to 61.8% from 61.6% in the previous two months and the size of the labor force increased.
All but two sectors were in the red for the week. Communication services had the largest drop, down 2.8%, followed by a 2.4% slide in consumer discretionary and a 2% decline in financials. The two sectors that managed to gain were utilities, up 1%, and real estate, up 0.1%.
Next week, inflation readings will be in focus as data are expected Friday on the November consumer price index and core inflation. The first reading of December consumer sentiment will also be released next Friday. Other data leading up to that will include the October trade deficit and consumer credit on Tuesday and weekly jobless claims as well as Q3 real household wealth on Thursday.
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