Wall Street’s main indexes extended losses on Friday after plunging in the previous session as technology stocks sold off again, overshadowing data showing a steeper-than-expected drop in the unemployment rate in August.
The tech-heavy Nasdaq dropped 4% as mega-cap companies Apple Inc, Microsoft Inc, Amazon.com Inc, Tesla Inc and Nvidia Inc slipped.
Earlier on Friday, the Labor Department’s closely watched employment report showed jobless rate fell to 8.4% from 10.2% in July, steeper than economists’ forecast of 9.8%. Nonfarm payrolls however, increased less than expected last month.
Still, the data adds pressure on the White House and Congress to restart stalled negotiations over the next coronavirus relief package to lift the economy out of the worst recession since the Great Depression.
“The data is consistent with an improving labor market that is helping to support consumption, but remains a long way away from pre-COVID-19 levels,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
After climbing to record highs on the back of historic stimulus and a narrow rally in heavyweight technology stocks, the S&P 500 and Nasdaq suffered their worst day in nearly three months on Thursday as investors booked gains.
Technology, communication services and consumer discretionary stocks fell the most among the major S&P sectors. Beaten-down sectors including financials, industrials and energy bucked the trend, rising between 0.4% and 1.0%.
Shares of rate-sensitive lenders rose 2.4% as the benchmark 10-year yield bounced off of a near four-week low. [US/]
Fund managers have warned Thursday’s declines may be a preview of a rocky two months ahead as institutional investors return from summer vacations and refocus on potential economic pitfalls.
The run-up to the Nov. 3 presidential election is also expected to add to volatility. At 10:18 a.m. ET, the Dow Jones Industrial Average was down 123.67 points, or 0.44%, at 28,169.06 and the S&P 500 was down 44.18 points, or 1.28%, at 3,410.88. The Nasdaq Composite was down 320.00 points, or 2.79%, at 11,138.11.
Wall Street’s fear gauge hit a more than 11-week high.
Apple supplier Broadcom Inc gained 1.2% after it forecast fourth-quarter revenue above analysts’ estimates.
Declining issues outnumbered advancers for a 1.26-to-1 ratio on the NYSE and a 2.09-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs and no new low, while the Nasdaq recorded 17 new highs and 38 new lows.