By Niket Nishant and Tharuniyaa Lakshmi
Sept 4 (Reuters) - The major U.S. stock indexes slipped on Friday after a stronger-than-expected jobs report prompted investors to ramp up bets on an interest rate hike later this month.
A Labor Department report showed the U.S. economy added 162,000 jobs in August, compared with estimates of 56,000, according to economists polled by Reuters. The unemployment rate stood at 4.1% last month, as expected.
The data could give the Federal Reserve more room to focus
on inflation, especially as Chair Kevin Warsh has indicated that controlling price pressures is his top priority.
"This is obviously a very volatile report, but it does mean that at this point the Fed's focus is going to be on inflation," said Josh Stevens, chief investment officer at CresAlta Investment Management.
Traders added to expectations of an interest rate hike at the central bank's September 15-16 meeting, with short-term interest-rate futures now implying a 60% chance of an increase, up from 55% before the report.
"The market just had a knee-jerk reaction to the jobs report. Investors are shooting first and asking questions later," said Thomas Hayes, chairman at Great Hill Capital.
At 11:52 a.m. ET, the Dow Jones Industrial Average fell 305.54 points, or 0.57%, to 53,380.57, the S&P 500 lost 33.99 points, or 0.44%, to 7,713.72 and the Nasdaq Composite lost 114.87 points, or 0.43%, to 26,469.19.
The declines round out a rollercoaster week that saw traders rushing to recalibrate expectations as fresh data, earnings and Fed Governor Christopher Waller's commentary shifted the policy outlook.
Attention now turns to next week's inflation readings, with the Labor Department set to release CPI and PPI data that could prove pivotal to the Fed's decision.
UTILITIES GAIN, CREDIT REPORTING FIRMS DROP
Consumer discretionary stocks fell 1.79% and led declines on the S&P 500. The PHLX semiconductor index rose 3% and was set to end a two-week losing streak.
Among individual stocks, Lululemon Athletica fell 17.99% after it slashed its full-year profit and revenue forecasts.
Adobe dropped 6.08%, as it said longtime CEO Shantanu Narayen will hand over the reins to company insider Anil Chakravarthy.
U.S. credit reporting agencies lost ground after U.S. Director of Federal Housing Bill Pulte said on Thursday he directed Fannie Mae and Freddie Mac, created by the U.S. Congress to support the housing market, to approve all lenders to use the credit-scoring system VantageScore.
Fair Isaac lost 15.99% and TransUnion was down 7.64%, while Equifax slid 6.58%.
As investors head into the Labor Day weekend, debate about the seasonal weakness of September also persists.
Historically, September is the weakest month for stocks. But most of the weakness comes in the second half of the month, with returns averaging worse than a 1% decline, according to Melissa Brown, global head of investment decision research at SimCorp.
Declining issues outnumbered advancers by a 1-to-1 ratio on the NYSE, while on the Nasdaq, advancing issues outnumbered decliners by a 1.02-to-1 ratio.
The S&P 500 posted one new 52-week high and five new lows, while the Nasdaq Composite recorded 35 new highs and 75 new lows.
(Reporting by Niket Nishant, Tharuniyaa Lakshmi and Purvi Agarwal in Bengaluru; Editing by Maju Samuel)
