Wall street drops back from fresh record highs to close lower

Wall Street made further records today after the nonfarm payrolls fuelled rally last week, but sold off as the day got going. 

"The market angst over the underlying trend in the US labor market should ease with the help of the second consecutive robust report," explained analysts at Brown Brothers Harriman.  "The 255k rise in non-farm payrolls was well above expectations, and the details were mostly favorable.  There were upward revisions to the May and June reports.   

The renewed vigor in the US labor market is helpful, but it does not address the main headwinds on the US economy that have led to sub-2% annualized pace of growth over the past nine months.  That weakness stems from the dramatic inventory liquidation cycle and ongoing poor business investment.  Nevertheless, we suspect that the strength of the labor market undergirds the confidence of Fed policymakers.  Real final demand (GDP excluding inventories and trade) appears to be understood as a more reliable guide."

Oil rallied on the OPEC news which lifted oil related stocks. The S&P 500, however finished lower and was down around 2 points, or 0.1%, at 2,180 while the Dow Jones Industrial Average dropped 14 points and closed at 18,529. The tech-heavy Nasdaq Composite dropped 0.2% and finished at 5,213.