U.S. Stocks Move Sharply Lower Following Job Openings Data

Stocks have moved sharply lower in morning trading on Tuesday, with the major averages all moving to the downside after ending the previous session mixed. With the drop, the Dow and the S&P 500 have fallen to their lowest intraday levels in four months.

In recent trading, the major averages have fallen to new lows for the session. The Dow is down 353.96 points or 1.1 percent at 33,079.39, the Nasdaq is down 206.26 points or 1.6 percent at 13,101.51 and the S&P 500 is down 54.56 points or 1.3 percent at 4,233.83.

Significant selling pressure emerged following the release of a report from the Labor Department unexpectedly showing a notable increase in U.S. job openings in the month of August.

The Labor Department said job openings surged to 9.61 million in August from an upwardly revised 8.92 million in July.

The jump surprised economists, who had expected job openings to edge down to 8.80 million from the 8.83 million originally reported for the previous month.

The data has added to concerns about the outlook for interest rates amid worries strength in the labor market could convince the Federal Reserve to raise rates higher than had been anticipated and keep rates an elevated level for longer than expected.

CME Group’s FedWatch Tool is currently indicating a 32.3 percent chance the Fed will raise rates by another quarter point next month and a 40.5 percent chance of a quarter point rate hike in December.

The interest rate worries have contributed to a continued surge by treasury yields, with the yield on the benchmark ten-year note jumping to its highest levels in sixteen years.

Key economic data due to be released in the coming days, including the closely watched monthly jobs report, could have a significant impact on the outlook for rates.

Sector News

Housing stocks have moved sharply lower in morning trading, dragging the Philadelphia Housing Sector Index down by 2.3 percent to its lowest intraday level in almost four months.

Significant weakness has also emerged among software stocks, as reflected by the 1.9 percent slump by the Dow Jones U.S. Software Index.

Interest rate-sensitive commercial real estate stocks are also seeing considerable weakness, with the Dow Jones U.S. Real Estate Index falling by 1.8 percent to a three-year intraday low.

Networking, financial and retail stocks have also moved notably lower, while gold stocks are among the few groups bucking the downtrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index tumbled by 1.6 percent, while Hong Kong’s Hang Seng Index plunged by 2.7 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index and the French CAC 40 Index have both slumped by 0.9 percent, the U.K.’s FTSE 100 Index is down by 0.4 percent.

In the bond market, treasuries are extending the sharp pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.0 basis points at 4.743 percent.

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