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Latest News >> The Markets Today 5th July  
 
After The Close Fri - Stocks pulled back somewhat on Friday, on not-quite-as-firm prospects that the Federal Reserve will lower interest rates later this month.Investors returning from Thursday’s Independence Day holiday were greeted with a stronger-than-expected monthly government employment report an hour prior to the opening bell. The Labor Department issued word that the nation added 224,000 jobs in June, which made up a good part of May’s weak showing. The three-month average for payroll additions now stands at a comparatively healthy 171,000. The positive takeaway is that the job market in June bounced back from a subpar performance in the previous month. The downside to the data is that it somewhat lessens the case for the Federal Reserve to reduce interest rates right away. The Fed’s next policy decision is due on July 31st.To be sure, there are still reasons for the central bank to ease monetary policy. The economic data of late has indicated weakness in areas such as manufacturing, housing, and consumer spending. Few inflationary pressures are apparent, either.As a result, the Fed could still see fit to lower rates as a sort of ``insurance policy’’ against what is shaping up as a broad global slowdown. But today’s strong payroll number makes it more likely that only a quarter-point rate cut would be in order, rather than the aggressive half-point rate reduction some had been looking for. The outlook for lower interest rates has clearly been a driving factor behind higher stock prices lately.Today’s stock market decline, which saw the Dow Industrials fall by more than 200 points early on, was eventually contained as traders probably concluded that lower rates remain part of the equation going forward. In other markets, the yield on the benchmark 10-year Treasury note rose jumped to 2.04%, from 1.95%, reflecting the positive news on the employment front. (Yields move inversely to prices).Notably, the price of gold dropped sharply after a nice run-up this year. The view that interest rates might not fall as quickly as previously envisioned means lingering competition for gold, which does not generate income on its own. At the end of the day, the Dow Jones Industrial Average slipped 44 points; the S&P 500 gave back five points; and the NASDAQ edged eight points lower.Investors will be watching news on earnings, interest rates, and the economy closely in the weeks ahead for clues as to the stock market’s near-term direction
 
 
   
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