Markets fall as Alphabet leads tech stocks lower

Dow added 29 after it recovered from early losses, advancers over decliners about 2-1 & NAZ was off 83.  The MLP index added 1+ to the 327s & the REIT index went up 4 to 405 as yields slid.  Junk bond funds were little changed & Treasuries saw heavy buying which lowered yields.  Oil dropped 1+ to the 71s & gold jumped 26 to 2902 for another record.

Dow Jones Industrials

Companies in the private sector added 183K jobs in Jan, payroll processing firm ADP said  The figure is above estimates of 150K jobs & also more than the prior month's reading of 122K.  "We had a strong start to 2025, but it masked a dichotomy in the labor market," said Nela Richardson, ADP's chief economist.  "Consumer-facing industries drove hiring, while job growth was weaker in business services and production."  Trade, transportation & utilities added 56K positions leading to job creation in Jan.  Leisure & hospitality added 54K jobs; education & health services contributed 20K; & information added 18K.  Hiring slowed in manufacturing (-1K), while elsewhere in the goods sector, natural resources & mining added 4K jobs, & construction added 3K positions.  Large businesses, those with 500 or more employees, added 97K jobs in the month. Businesses with 50 - 499 employees hired 9K workers. Establishments with fewer than 50 employees added 5K jobs.  The ADP data is released before the Labor Dept's nonfarm payrolls report that is due on Fri & can differ notably.  The gov data is expected to show an increase of 170K positions, down from the much larger than anticipated gain of 256K in Dec.

Private sector has 'strong start' to 2025, adds 183,000 jobs to go above expectations

Alphabet (GOOG) shares dropped after the search giant fell short of 4th-qtr revenue expectations & announced big spending plans for its ongoing artificial intelligence buildout.  The company topped EPS estimates by 2¢.  Revenue came in at $96.47B, behind the $96.56B expected.  GOOG's revenue grew 12% overall from a year ago, while its YouTube advertising business, search business & services segment slowed year over year.  It plans to spend $75B on capital expenditures as it builds out its AI offerings & races against megacap rivals to build out data centers & new infrastructure. The figure was much higher than the $58.8Bexpected.  Finance chief Anat Ashkenazi said the higher expenses will help “support the growth of our business across Google Services, Google Cloud and Google DeepMind.”  She also said the spending will go toward “technical infrastructure, primarily for servers, followed by data centers and networking.”  The company expects capital expenditures at $16 - $18B.  That was higher than the $14.3 billion estimate.  The stock sank 16 (8%).

Alphabet shares fall more than 7% on revenue miss, AI investment boost

The yield on the 10-year Treasury slid as traders digested fresh ADP payroll data & look for clues on the health of the US economy.  The benchmark yield was down 8 basis points to trade at 4.432%, while the yield on the 2-year Treasury fell 4 basis points to 4.172%.  1 basis point is equal to 0.01% & yields & prices move in opposite directions.  The bond market moves come after the Treasury Dept announced it would be keeping auction sizes steady “for at least the next several quarters” while providing “incremental” increases to the size of its sales for Treasury Inflation-Protected Securities.  The dept also said it will be issuing more short-term bills than usual as it uses “extraordinary measures” to keep the gov operating while Congress battles over the debt limit.  The moves also follow Federal Reserve Vice Chair Philip Jefferson revealing yesterday that the central bank should be careful how it adjusts interest rates amid an uncertain policy environment.  In broad terms, the Fed governor said he sees the economy strong, with inflation easing back on a “bumpy” road to the central bank’s 2% goal & a labor market in a “solid position.”

10-year Treasury yield slips as traders digest fresh U.S. data

Stocks pulled back after earnings from GOOG & AMD (AMD) fell short, with investors on alert for fresh moves in the brewing US-China trade war.  AI trade hopes were dealt a second blow by AMD's earnings.  Big Tech names like GOOG are also getting caught up in the tariff tit-for-tat between the US & China, which traders see as a risk for tech & chip name stocks.