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While you were sleeping: Wall St drops as US job openings climb to record

UPDATED The markets are braced for volatility on "Super Thursday."

Margreet Dietz
Wed, 07 Jun 2017

Wall Street ended lower a day before Brits head to the polls, former FBI Director James Comey testifies and European Central Bank policymakers gather.

Meanwhile, US Treasury bonds rose, pushing the yield on the 10-year note four basis points lower to a 2017 low of 2.174% from 2.182% on Monday.

Gold rose 1.2% to a 2017 high of $US1294.40. 

At the close of trading in New York, the Dow Jones Industrial Average fell 47.81 points, or 0.2%, to 21,136.23. The Nasdaq Composite Index eased 0.3% to 6275.06 and the Standard & Poor's 500 Index slid 0.3% to 2429.33..

"There is not much scheduled today that could potentially inspire the markets as the main focus this week is on 'Super Thursday,"' Piotr Matys, a London-based currency strategist at Rabobank, wrote in a client note, according to Bloomberg.

"Essentially, we brace for a volatile session on Thursday and Friday as at least one of those crucial events could trigger sharp moves in the markets."

Retailers lead fall 
The Dow slid as declines in shares of Wal-Mart Stores and those of Walt Disney, down 1.8% and 0.8% respectively, outweighed gains in shares of Exxon Mobil and Chevron, up 1.4% and 1.1% respectively as oil prices climbed.

US crude for July delivery gained 1.7% to $US48.19 a barrel, snapping a two-session streak of losses.

Shares of retailers fell, with Macy’s shedding 8.2% after the company’s chief financial officer said margins were under pressure. The company’s shares are down 39% so far this year. Kohl’s fell 5.8% and Nordstrom lost 3.6%.

As if investors needed further confirmation of expectations that Federal Reserve policy makers will lift interest rates at their two-day meeting next week, a key metric offered exactly that.

Job openings rise to record
The Labour Department's Job Openings and Labour Turnover Survey, or JOLTS, showed that US job openings climbed 259,000 to a seasonally adjusted 6.0 million in April, a record high.

"These data underscore the difficulty in hiring new workers, which we think is increasingly likely to be a factor restraining payroll growth going forward," John Ryding, chief economist at RDQ Economics in New York, told Reuters.

"The Fed becomes somewhat uneasy when the labour market becomes too tight and this report supports the Fed's case to nudge rates higher next week."

In the latest US earnings data, shares of Michaels Companies tumbled 7.5% after the arts and craft retailer downgraded its earnings outlook because of the weakening Canadian dollar.

"The value of the Canadian dollar has weakened since we established our prior outlook, and we have adjusted our fiscal 2017 full year guidance to reflect our expectation this currency trend continues," chief executive Chuck Rubin said in a statement.

In Europe, the Stoxx 600 Index finished the day with a 0.7% retreat from the previous close. The UK's FTSE 100 Index edged 0.01% lower, while France's CAC40 Index declined 0.7% and Germany's DAX Index dropped 1%.

ECB President Mario Draghi is set to speak after the Governing Council meeting ends on Thursday.

"The Governing Council is likely to remain very cautious in its communication about the exit strategy in an environment where, despite the good growth performance, the outlook for inflation remains bleak," Philippe Gudin, chief European economist at Barclays, told Bloomberg.

(BusinessDesk)

Margreet Dietz
Wed, 07 Jun 2017
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While you were sleeping: Wall St drops as US job openings climb to record
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