Wall Street mixed as jobs data fuels rate-hike optimism

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Traders work on the floor of the NYSE in New York

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 19, 2023. REUTERS/Brendan McDermid/File Photo Acquire Licensing Rights

  • Unemployment rate rises in August
  • Dell gains on raising full-year forecasts
  • Disney, Charter fall amid rates dispute
  • Indexes: S&P 500 +0.06%, Nasdaq -0.10%, Dow +0.19%

Sept 1 (Reuters) - Wall Street stocks were near unchanged on Friday after a jump in unemployment cemented expectations of a pause in interest rate hikes this month, while shares of streaming firms tumbled due to a rate dispute between Disney and Charter Communications.

The Labor Department's report showed the August unemployment rate rose to 3.8% while wage growth slowed. Nonfarm payrolls rose more than expected, though data for July was revised lower to 157,000 job additions.

The data added to recent macroeconomic evidence that the Federal Reserve is winning its battle against inflation, and it cemented expectations the central bank is near the end of its interest rate hiking cycle.

"The data makes the case for the Fed becoming more dovish as we head into the fall. If the end of tightening comes sooner than later, that could lead to a substantial rally in stocks," said Keith Buchanan, a portfolio manager at GLOBALT Investments in Atlanta.

Interest rate futures suggest traders see a 93% chance the Fed will keep interest rates unchanged at its meeting later this month, according to CME's FedWatch tool.

Walt Disney (DIS.N) and Charter Communications (CHTR.O) each fell more than 2% after the companies traded salvos over an unresolved distribution agreement after several channels, including ESPN, went dark on Thursday for customers of Charter's Spectrum cable service.

Other streaming companies also fell, with Warner Bros Discovery (WBD.O), Paramount Global (PARA.O) and Fox Corp tumbling between 5% and 10%. That dragged the S&P 500 communication services sector (.SPLRCL) 0.6% lower.

The most traded stock in the S&P 500 (.SPX) was Tesla , with $23 billion worth of shares exchanged during the session. Its shares dropped 5% after the EV maker cut prices for its Model S and Model X vehicles in the U.S.

The S&P 500 was up 0.06% at 4,510.51 points.

The Nasdaq declined 0.10% to 14,020.42 points, while the Dow Jones Industrial Average was up 0.19% at 34,787.35 points.

All three main U.S. stock indexes are on track to post weekly gains, with the tech-heavy Nasdaq (.IXIC) up about 3% so far this week.

Broadcom (AVGO.O) fell 5.2% after the chipmaker projected current-quarter revenue below expectations, while Dell Technologies (DELL.N) surged 21% after the personal computer maker raised its annual forecasts for revenue and profit.

Lululemon Athletica (LULU.O) gained 5.5% after the yogawear maker lifted its annual profit and revenue forecasts for a second time.

Walgreens Boots Alliance (WBA.O) slipped 6.6% after the pharmacy chain said CEO Rosalind Brewer had stepped down.

Reporting by Shristi Achar A and Amruta Khandekar in Bengaluru, and by Noel Randewich in Oakland, California; Additional reporting by Sruthi Shankar; Editing by Shounak Dasgupta and Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

Shristi is a correspondent, part of the markets team reporting on the stock markets across U.S., UK, Canada, Europe and Emerging markets.

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