U.S. stocks sank Thursday after economic data showed continued tightness in the labor market that's likely to keep the Federal Reserve on track for higher interest rates. Investors also look ahead to tomorrow's key monthly jobs report.
The S&P 500 (^GSPC) plopped 1.2%, while the Dow Jones Industrial Average (^DJI) shed 340 points, or 1.0%. The technology-heavy Nasdaq Composite (^IXIC) tumbled by 1.5%.
The ADP National Employment report showed private payrolls grew by 235,000 jobs in December. Economists surveyed by Bloomberg called for an increase of 150,000.
Filings for unemployment insurance also fell to 204,000, the lowest since September, in the week ended Dec. 31 from the prior week's downwardly revised reading of 223,000, the Labor Department said Thursday.
The reports were the latest to reflect strong demand for workers, even as the Federal Reserve presses on with aggressive monetary tightening to rein in inflation. ADP's data and weekly jobless claims follow a separate measure Wednesday that found job openings fell less than expected last month and remained high. The Labor Department's monthly nonfarm payrolls survey due out Friday morning remains the most important reading for Fed officials and investors attempting to predict the next policy move.
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