U.S. Stocks Come Under Pressure After Early Move To The Upside

After moving mostly higher early in the session, stocks have shown a notable downturn over the course of the trading day on Friday. The major averages have pulled back well off their highs of the session, with the tech-heavy Nasdaq leading the way lower.

Currently, the Nasdaq is down 169.53 points or 1.0 percent at 16,103.85 and the S&P 500 is down 27.43 points or 0.5 percent at 5,129.93. The narrower Dow is posting a more modest loss, edging down 8.01 points or less than a tenth of a percent to 38,783.34.

The early strength on Wall Street came as the Labor Department’s closely watched monthly jobs report added to optimism about the outlook for interest rates.

While job growth in February came in much stronger than expected, the report also showed notable downward revisions to job growth in the two previous months.

The Labor Department said non-farm payroll employment surged by 275,000 jobs in February, while economists had expected employment to jump by 200,000 jobs.

However, the report also said job growth in December and January was downwardly revised to 290,000 and 229,000 jobs, respectively, reflecting a net downward revision of 167,000 jobs.

The Labor Department also said the unemployment rate rose to 3.9 percent in February from 3.7 percent in January. Economists had expected the unemployment rate to come in unchanged.

The downward revisions and the unexpected increase in the unemployment rate combined with a slowdown in the annual rate of wage growth has added to optimism the Federal Reserve will begin lowering interest rates in June.

Buying interest remained somewhat subdued, however, as traders seemed reluctant to continue buying stocks ahead of the release of key inflation data next week that could have a more profound impact on the outlook for rates.

The subsequent downturn by the markets partly reflects profit taking, with the Nasdaq and S&P 500 coming under pressure after reaching new record intraday highs.

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