Wall Street Trims Gains on Greece Uncertainty, Tepid Jobs Report

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Wall Street Trims Gains on Greece Uncertainty, Tepid Jobs Report

US stocks pared early morning gains to trade lower after weak US jobs data dampened the country’s economic outlook, and the uncertainty over Greece continued after the International Monetary Fund warned that the country may need a further large debt payoff.

The Dow Jones Industrial average most recently edged down 51 points or 0.3% at 17.706 points, the blue chip index remained on track for a weekly decline.

The S&P 500 Index most recently slipped 5 points or -0.2% at 2,072 points with more than six of its ten key sectors trading lower on the day.

The Nasdaq Composite fell 17 points or 0.4% at 4,994 points.

“I think Greece is weighing on markets—the uncertainty and the lack of resolution. It’s taken longer than most people were expecting,” Stephen Freedman, senior investment strategist at UBS Wealth Management Americas, told CNBC.

Still, “it’s good to know the fundamentals of the U.S. economy are solid given the geopolitical risks elsewhere.”

Government employment data for June showed that the number on non-farm payrolls in the US grew by 223,000, much lower than the 230,000 consensus estimate of analysts polled by Reuters.

Unemployment in the US fell to 5.3% but only because of more people leaving the labor force while new claims for unemployment benefits grew by 10,000 to 281,000 for the same period.

The weaker expected jobs data pushed stocks higher in morning trading on hopes that the lackluster economic data would push the Federal Reserve to be patient in raising the lending rates.

“It’s a solid report, not overly strong but exactly what the Fed will need to continue to justify the case for liftoff later this year,”  Darrell Cronk, president of Wells Fargo Investment Institute, told the Wall Street Journal.

Stocks however pared gains on the continuing uncertainty over Greece after the International Monetary Fund warned that even if Greece agreed to all the terms on the bailout deals, loans made by Europe would still need to be significantly increased and that the country would need concessional financing.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com