Stocks fell lower on Thursday after stronger-than-expected employment data signaled that the labor market remains tight despite the Federal Reserve's aggressive interest rate hikes. The Dow Jones Industrial Average dropped over 300 points, while the S&P 500 and Nasdaq Composite fell 1% and 1.5%, respectively.
Here's how the market settled on Thursday:
S&P 500 Index (NYSE: SPY): -1.16% or -44.87 points to 3,808.10
Dow Jones Industrial Average (NYSE: DIA): -1.02% or -339.69 points to 32,930.08
Nasdaq Composite Index (NASDAQ: QQQ): -1.47% or -153.52 points to 10,305.24
Driving market moves, the ADP private payrolls report released Thursday morning showed employers added 235,000 jobs in December, topping Bloomberg estimates for an increase of 150,000. Weekly jobless claims also fell to a three-month low at 204,000 last week, marking its lowest level since September and indicates that the labor market remains resilient amid higher interest rates.
Also impacting the broader market, Amazon (NASDAQ: AMZN) CEO Andy Jassy said in a note late Wednesday that the ecommerce giant's planned job cuts will impact at least 18,000 employees, above previous estimates. The Wall Street Journal reported that Jassy said the majority of the layoffs are from the company's retail and recruiting segments.
Bed Bath & Beyond (NASDAQ: BBBY) was also in the spotlight on Thursday after the retailer warned that it may be facing bankruptcy due to its continued financial struggles. The retailer, citing worse-than-expected sales, said it will likely not have enough cash to cover expenses and is exploring financial options, including restructuring, seeking additional capital, selling assets, and a potential bankruptcy.
Elsewhere, Silvergate Capital (NYSE: SI) shares cratered over 40% on Thursday after the Wall Street Journal reported the bank sold assets to cover $8.1 billion in withdrawls in the wake of the FTX cryptocurrency exchange collapse.
Coinbase (NASDAQ: COIN) declined Thursday after Cowen analysts downgraded the crypto exchange to Market Perform from Outperform, citing a reduction in trading volumes following FTX's bankruptcy.
"There is low visibility per stabilization in retail trading volumes in 2023 following further December deterioration," the firm wrote in a note on Thursday. "Potential SEC enforcement action is elevated post-FTX with regulatory certainty unlikely until 2024."
On Friday, investors will react to the December jobs reports and look for more clues on the Federal Reserve's next moves in response to updated data on employment levels and wage growth. Economists estimate that U.S. employers added about 200,000 payrolls last month, representing a slight slowdown from November's gains.