Roundup: U.S. stocks slump on rate hike concerns

U.S. stocks fell sharply Friday, with the three major indices all losing more than 1 percent, as investors worried that a strong jobs report indicated the rate hike could come sooner rather than later.

The Dow Jones Industrial Average tumbled 278.94 points, or 1.54 percent, to 17,856.78. The S&P 500 dropped 29.78 points, or 1.42 percent, to 2,071.26. The Nasdaq Composite Index decreased 55.44 points, or 1.11 percent, to 4,927.37.

Total nonfarm payroll employment increased by 295,000 in February, well above market expectations, and the unemployment rate edged down to 5.5 percent, the U.S. Labor Department said in a report Friday.

In February, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to 24.78 U.S. dollars. Over the year, average hourly earnings have risen by 2 percent.

A strong monthly jobs report, however, heightened speculations that the Federal Reserve could raise interest rates sooner than anticipated.

"Strong hiring continues in the first quarter. It's not quite up to the fourth quarter's 324,000/month, but 252,000/month is plenty strong enough to keep the Fed on the tightening track despite that pesky falling inflation rate," said Chris Low, chief economist at FTN Financial, in a note.

Meanwhile, the U.S. trade deficit in goods and services decreased to 41.8 billion dollars in January from 45.6 billion dollars in December, as imports decreased more than exports, said the U.S. Commerce Department.

In corporate news, Apple, the largest U.S. company by market value, will join the Dow Jones Industrial Average on March 18 after the closing bell, replacing AT&T, said S&P Dow Jones Indices in a press release Friday. The tech giant's shares edged up 0.15 percent to 126.60 dollars apiece.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, increased 8.26 percent to end at 15.20 Friday.

In other markets, oil prices extended losses as global supply glut weighed on the market. Light, sweet crude for April delivery lost 1.15 dollars to settle at 49.61 dollars a barrel on the New York Mercantile Exchange (NYMEX).

The dollar rallied against other major currencies as the country's nonfarm payroll report came out better than expected.

In late New York trading, the euro fell to 1.0858 dollars from 1.1027 dollars in the previous session, while the dollar bought 120.69 Japanese yen, higher than 120.16 yen of the previous session.

Gold futures on the COMEX division of the NYMEX fell as the much-anticipated jobs report showed much-better-than-expected job growth. The most active gold contract for April delivery fell 31.9 dollars, or 2.67 percent, to settle at 1,164.30 dollars per ounce. Endite