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Friday's Bank Stocks: Jobs report pushes equities down

Banking Essentials Newsletter December Edition Part 2

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Friday's Bank Stocks: Jobs report pushes equities down

Stocks broadly traded down Oct. 6 as new jobs data revealed U.S. nonfarm payroll employment decreasing by 33,000 in September, undershooting expectations for an increase of 100,000 jobs for the month.

The U.S. Department of Labor noted that the numbers were largely the result of hurricanes Harvey and Irma.

Market participants added that the noise of the hurricanes makes it difficult for the Federal Reserve to get a read on what labor market conditions are really like, as policymakers head toward a critical December Federal Open Market Committee meeting where the central bank will decide on whether or not it will fulfill its forecast of three rate hikes for 2017.

Quincy Krosby, chief market strategist at Prudential Financial, said that the underlying components of the jobs report, which included an increase in average hourly earnings and an unchanged labor force participation rate, were stronger than expected. But she said the Fed is still working through data, particularly on transitory factors holding down inflation, in its consideration of its next move on monetary policy.

"There's been a tug-of-war with those numbers, on whether or not the market is strong enough for another rate hike," Krosby said. She added that she will be watching for a number of key reports on inflation next week, namely the Producer Price Index scheduled for release Oct. 12.

The major indexes traded down for most of the day before regaining some losses just before market close. The Dow Jones Industrial Average ticked down 0.01% to 22,773.67, the S&P 500 lost 0.11% to 2,549.33 and the Nasdaq composite index added 0.07% to 6,590.18. Bank stocks fared slightly better in trading, as the SNL U.S. Bank Index added 0.11% to 582.79 by market close.

At the largest banks, JPMorgan Chase & Co. declined 0.18% to $96.92, Citigroup Inc. lost 0.11% to $75.64, Bank of America Corp. gained 0.31% to $26.21, and Wells Fargo & Co. gained 0.34% to $55.58.

Among notable movers, Moorefield, W.Va.-based Summit Financial Group Inc. added 2.49% to $27.54; Los Angeles-based Preferred Bank increased 1.97% to $60.05; and San Juan, P.R.-based First BanCorp. gained 1.95% to $5.23. Mount Laurel, N.J.-based Marlin Business Services Corp. declined 1.70% to $28.85.

In thrifts, the SNL U.S. Thrift Index decreased 0.09% to 943.52, as New York Community Bancorp Inc. lost 0.15% to $12.97.

Market prices and index values are current as of the time of publication and are subject to change.