Dow climbs in early Friday action as Wall Street attempts to cap tumultuous trading week with an upswing


Stock benchmarks on Friday rose modestly higher as investors looked to close out a volatile, holiday-shortened week that has the tech-heavy Nasdaq Composite on track for its biggest weekly loss since the height of the pandemic-induced market selloff in March.

How are major benchmarks trading?

The Dow Jones Industrial Average
DJIA,
+0.19%

rose 117 points, or 0.4%, to around 27,650, while the S&P 500
SPX,
+0.07%

gained 14 points, or 0.4%, to trade at 3,353. The Nasdaq Composite Index
COMP,
-0.09%

climbed 48 points, or 0.5%, at 10,952. But all three benchmarks were trading off their intraday peak near the open, highlighting the week’s choppy action.

The Dow on Thursday fell 405.89 points, or 1.5%, to close at 27,534.58, while the S&P 500 ended with a loss of 59.77 points, or 1.8%, at 3,339.19. The Nasdaq Composite fell 221.97 points, or 2%, to finish at 10,919.59. Through Thursday, the Dow was down 2.1% for the week, while the S&P 500 was off 2.6% and the Nasdaq was 3.5% lower; markets were closed Monday for Labor Day.

What’s driving the market?

A decline in the S&P 500 index for the week would mark the benchmark’s first back-to-back weekly drop since May.

“While monetary policy is set to remain supportive for several more quarters, valuations are high across assets and volatility is resurfacing,” said Elia Lattuga, co-head of strategy research at UniCredit Bank, in a note. “The breadth of the rally is still limited and the recovery uneven—hence developments in the economic outlook and political risks represent significant threats to risk appetite.”

Stocks were unable to follow through Thursday on a Wednesday bounce that saw equities recover somewhat from a three-day, tech-led rout that pushed the Nasdaq into correction territory, falling more than 10% from its record close set last week.

Weakness on Thursday was partly tied to the inability of U.S. politicians to agree on a new coronavirus rescue package after Democrats blocked a Republican bill on the Senate floor, leaving the way forward unclear, analysts said.

Meanwhile, investors have fretted that the sharp rally that took stocks from their March pandemic lows to new all-time highs had left valuations significantly stretched for the large-cap, tech-related stocks that had led the rally this year. Among those highfliers, shares of Apple Inc.
AAPL,
-0.85%

 and Netflix Inc.
NFLX,
+1.22%

 were on track for weekly declines of more than 6%, while Facebook Inc.
FB,
-0.57%

 is off more than 5%.

In U.S. economic news, the consumer-price index for August rose 0.4% last month, beating average economists’ estimates for a rise of 0.3% but falling below the past two months at 0.6%. On a year-over-year basis, the CPI increased 1.3% after gaining 1.0% in July, the Labor Department said on Friday

Looking ahead, Federal budget figures for August are due at 2 p.m. Eastern.

Which companies are in focus?
What are other markets doing?

The yield on the 10-year Treasury note
TMUBMUSD10Y,
0.675%

 rose 0.4 basis point to 0.687%. Bond prices move inversely to yields.

The ICE U.S. Dollar Index
DXY,
-0.12%
,
which tracks the performance of the greenback against its major rivals, fell 0.1%.

Gold futures
GCZ20,
-0.08%

were off 0.3% at $1,958 an ounce, threatening to snap a three-day winning streak. The U.S. crude oil benchmark
CL.1,
-0.10%

 fell 16 cents, or 0.5%, to $37.13 a barrel.

The Stoxx Europe 600 index
SXXP,
-0.11%

 was edging 0.1% lower, while the U.K.’s benchmark FTSE
UKX,
-0.26%

rose 0.2%. In Asia, Hong Kong’s Hang Seng Index
HSI,
+0.78%

and the Shanghai Composite Index
SHCOMP,
+0.78%

 both rose 0.8%, while Japan’s Nikkei
NIK,
+0.73%

rose 0.7%.



Original source link

Asian markets mixed as China export data offsets impact of Wall Street’s retreat


Asian markets were mixed in early trading Monday, following a sharp selloff on Wall Street last week.

Japan’s Nikkei 225
NIK,
-0.33%

dipped 0.3% while Hong Kong’s Hang Seng index
HSI,
+0.05%

gained 0.1%. The Shanghai Composite
SHCOMP,
-0.15%

declined 0.2% while the smaller-cap Shenzhen Composite
399106,
-0.25%

retreated 0.2%. South Korea’s Kospi
180721,
+0.76%

rose 0.7%, while benchmark indexes in Taiwan
Y9999,
-0.14%

, Singapore
STI,
+0.11%

and Indonesia
JAKIDX,
-0.13%

were mixed. Australia’s S&P/ASX 200
XJO,
+0.14%

were little changed.

Stocks in Hong Kong and mainland China improved after the release of data that showed China’s August exports were stronger than expected from the prior year, after another strong increase in July.

Shares of Chinese chip maker Semiconductor Manufacturing International Corp.
981,
-19.74%

tumbled about 20% in Hong Kong trading after a Wall Street Journal report that the Trump administration is considering placing export restrictions against it, as it has with fellow chip maker Huawei Technologies.

U.S. markets are closed Monday for the Labor Day holiday. Last week, the tech-heavy Nasdaq Composite
COMP,
-1.26%

saw a 3.3% weekly decline, its largest since March, while the Dow Jones Industrial Average
DJIA,
-0.56%

fell 1.8% and the S&P 500
SPX,
-0.81%

lost 2.3%.

“We view the latest selloff as a bout of profit-taking after a strong run,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note Friday.

“Stocks have had a nervy start to trading Monday after the massive two-day slide for global equities since June left investors on edge,” Stephen Innes, chief global markets strategist at AxiCorp, wrote in a note Monday. “In the short-term, more so with U.S. markets closed today, it should remain an extremely choppy affair, with bounces likely being sold by design.”

In energy trading, U.S. benchmark crude
CLV20,
-1.30%

fell to $39.34 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude
BRNX20,
-1.10%

, the international standard, slipped to $42.30 a barrel.

The dollar
USDJPY,
+0.01%

inched up to 106.29 Japanese yen from 106.24 yen Friday.



Original source link

U.S. regains 1.4 million jobs in August and unemployment drops to 8.4% as economic recovery shows resilience


The numbers: The U.S. regained 1.4 million jobs in August and the unemployment rate posted a surprisingly large drop to 8.4%, suggesting an economic recovery is still plowing ahead even if the pace of growth has slowed since the start of the summer.

The increase in hiring last month exceeded Wall Street’s forecast. Economists polled by MarketWatch had forecast a 1.2 million gain. U.S. stocks fell in Friday trades.

The employment picture was a bit softer after stripping out the hiring of 238,000 temporary Census workers and those who work in public education.

Private-sector hiring rose by 1 million, down from 1.48 million in July, the government said Friday.

The most positive news was a big reduction in the official jobless rate to 8.4% from 10.2%, marking the fourth straight decline from a pandemic peak of 14.7%. A separate survey of households showed a much larger number of people returning to work (3.76 million) and a sharp decline in the unemployed (-2.8 million).

“I would say today’s jobs report was a good one,” Federal Reserve Chairman Jerome Powell told NPR in an interview.

One caveat: The jobless rate would have been closer to 9% if households gave an accurate description of their employment status, the Bureau of Labor Statistics said. Some survey respondents have mistakenly classified themselves as absent from work instead of unemployed, a problem that has plagued the BLS survey since the pandemic began.

Several million Americans still haven’t returned to the labor force, however, since the start of the pandemic and some 29 million were reportedly receiving jobless benefits as of the middle of last month.

Read: Initial jobless claims fall to new pandemic low of 881,000 — but there’s a big catch

The start of the school year, what’s more, has also spawned fresh problems for companies and their employers.Many parents lack day-care options and are grappling with how to care for their school-age children learning at home while they work at the same time.

A new Federal Reserve study found the new school year has made it harder for businesses that are hiring to attract workers.

Read:Economy softened in August, Fed says, as some temporary layoffs turn permanent

A stalemate in Congress over another financial-rescue package has also left many unemployed Americans in a more precarious financial position. A $600 federal unemployment stipend expired at the end of July and small businesses can no longer apply for loans to help cover payroll costs.

Read: Did the expired $600 federal jobless benefit keep people from going back to work?

A spate of companies such as American Airlines
AAL,
+1.87%
,
United
UAL,
+2.16%

and MGM Resorts
MGM,
+1.95%
,
meanwhile, have announced new furloughs and layoffs with their businesses still in a deep slump.

A United Airlines ticket agent helps a passenger check in for a flight at San Francisco International Airport. United Airlines announced plans to furlough over 16,000 workers including pilots, flight attendants and technicians.


Getty Images

Some companies warn job losses could become permanent without more government help or a faster rebound in the economy.

The U.S. shed more than 22 million jobs during the worst of the pandemic. So far it’s restored about 10.7 million jobs, leaving about half of the people who were laid off still out of work.

What happened: The number of peopled employed by government jumped by 344,000, largely because of a big increase in temporary Census workers.

In the private sector, retailers led the way in hiring again as they brought back almost one-quarter of a million workers. Restaurants also added 134,000 jobs.

Retailers, restaurants and hotels have borne the brunt of the U.S. effort to contain the coronavirus. The number of customers they can allow has been restricted and many Americans are still too worried about the coronvirus to eat out, go to stores or travel.

Even after a spate of rehiring, for instance, some 2.5 million restaurants jobs still haven’t returned.

The rest of the hiring was scattered in a variety of industries.

White-collar businesses added almost 200,000 jobs, though more than half were temporary. Transportation and warehousing jobs increased by 78,000. Health-care providers boosted payrolls by 75,000. Financial firms hired 36,000 workers. And manufacturers added 29,000 people.

Average hourly wages rose 11 cents to $29.47 an hour. The yearly rate of pay appeared to soar early in the pandemic, but only because more lower-paid workers lost their jobs than higher paid ones.

The normally slow-changing wage data is likely to be less useful until the economy is mostly recovered. Wages were growing about 3% a year before the pandemic.

The increase in employment in July marked down slightly to 1.73 million. The increase in June was little changed at 4.79 million.

How many people are really unemployed, though, is still a bit of a mystery. The monthly employment survey puts the number at 13.6 million, but the weekly jobless-claims report indicates it could be closer to 30 million.

A broader measure of unemployment known as the U6 suggests the “real” rate was 14.2% in August, down from 16.5% in the prior month. The U6 rate includes workers who can only find part-time work and those who have become too discouraged to look for jobs because so few are available.

Big picture: The U.S. economy have proven quite resilient, expanding again in August despite the summer viral outbreak and the end of massive federal benefits. A variety of reports such as restaurant reservations, retail spending and in-store shopping also suggest an increase in consumer spending and steady if slower growth in the economy.

What’s less clear is whether the economy can sustain its foward progress.

Unemployment remains sky-high, the threat of a fresh wave of layoffs is rising and the coronavirus is still very much a threat. A divided political leadership in Washington and one of the most divisive presidential elections in history is unlikely to help, either.

See:Marketwatch’s Coronavirus Economic Recovery Tracker

What they are saying? “The August employment report was stronger than we expected,” said chief economist Richard Moody of Regions Financial. “ That said, while the labor market is clearly healing, it remains far from healthy.”

There are certain industries that are essentially stuck until the virus recedes further, such as air travel, sporting event and concert admissions,” said chief economist Stephen Stanley. “But for most of the economy, the return to normal is occurring inch by inch and day by day, with plenty more to come.”

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.56%
,
S&P 500
SPX,
-0.81%

and Nasdaq
COMP,
-1.26%

all declined in Friday trades.



Original source link

Here are the biggest stock-market losers on Thursday as the tech sector tanks


An epic run for technology stocks ended Thursday, as they led a broad decline for the U.S. market. Lists of the day’s worst performing stocks in benchmark indexes are below.

• The Dow Jones Industrial Average
US:DJIA
was down 808 points, or 2.8%, for the session, and is down 0.9% for the year so far. (All price changes in this article exclude dividends.)

• The S&P 500 Index
US:SPX
fell 3.5% but is still up 6.9% on the year.

• The Nasdaq Composite Index
US:COMP
took a 5% dive, slicing into its 27.7% year-to-date gain. David Bahnsen, chief investment officer of the Bahnsen Group in Newport Beach, Calif., wrote in an email that a pullback in technology stocks was appropriate, as “the Nasdaq has advanced violently since March and many names are at absurd valuations.”

MarketWatch reporter William Watts explained why the stock market’s high valuations weren’t limited to the dominant technology companies.

All 11 components of the S&P 500 ended the day with significant declines:

S&P 500 sector

Price change – Sept. 3

Price change – 2020

Price change – 2019

Information Technology

-5.8%

30.5%

48.0%

Consumer Discretionary

-3.6%

25.5%

26.2%

Communication Services

-3.3%

14.8%

30.9%

Industrials

-2.8%

-4.8%

26.8%

Materials

-2.8%

4.8%

21.9%

Health Care

-2.7%

4.2%

18.7%

Consumer Staples

-1.9%

3.9%

24.0%

Real Estate

-1.6%

-6.2%

24.9%

Financials

-1.6%

-18.7%

29.2%

Utilities

-1.3%

-8.2%

22.2%

Energy

-0.7%

-42.8%

7.6%

Source: FactSet

Dow Jones Industrial Average

All but two of the 30 components of the Dow declined on Thursday:

Company

Ticker

Price change – Sept. 3

Price change – 2020

Price change – 2019

Apple Inc.

US:AAPL -8.0%

64.7%

86.2%

Microsoft Corp.

US:MSFT -6.2%

37.8%

55.3%

Home Depot Inc.

US:HD -4.4%

25.8%

27.1%

Salesforce.com Inc.

US:CRM -4.2%

62.9%

18.7%

Amgen Inc.

US:AMGN -4.0%

2.8%

23.8%

Honeywell International Inc.

US:HON -3.6%

-6.0%

34.0%

Intel Corp.

US:INTC -3.6%

-15.8%

27.5%

Visa Inc. Class A

US:V -3.5%

11.2%

42.4%

Cisco Systems Inc.

US:CSCO -3.5%

-14.6%

10.7%

Boeing Co.

US:BA -3.4%

-48.2%

1.0%

Nike Inc. Class B

US:NKE -3.4%

11.4%

36.6%

International Business Machines Corp.

US:IBM -2.9%

-7.2%

17.9%

Johnson & Johnson

US:JNJ -2.8%

2.5%

13.0%

Walmart Inc.

US:WMT -2.1%

21.6%

27.6%

3M Co.

US:MMM -1.9%

-5.7%

-7.4%

Travelers Cos. Inc.

US:TRV -1.8%

-15.8%

14.4%

Dow Inc.

US:DOW -1.7%

-11.6%

N/A

Caterpillar Inc.

US:CAT -1.7%

-0.6%

16.2%

Merck & Co. Inc.

US:MRK -1.7%

-6.0%

19.0%

Procter & Gamble Co.

US:PG -1.6%

10.7%

35.9%

Walt Disney Co.

US:DIS -1.6%

-7.9%

31.9%

Coca-Cola Co.

US:KO -1.4%

-8.8%

16.9%

UnitedHealth Group Inc.

US:UNH -1.3%

7.6%

18.0%

Goldman Sachs Group Inc.

US:GS -1.2%

-9.7%

37.6%

McDonald’s Corp.

US:MCD -1.1%

8.2%

11.3%

Chevron Corp.

US:CVX -1.1%

-31.7%

10.8%

JPMorgan Chase & Co.

US:JPM -0.3%

-27.3%

42.8%

Walgreens Boots Alliance Inc.

US:WBA -0.2%

-37.1%

-13.7%

American Express Co.

US:AXP 0.1%

-16.1%

30.6%

Verizon Communications Inc.

US:VZ 0.1%

-1.3%

9.2%

Source: FactSet

Scroll the table to see all the data.

You can click on the tickers for more about each company.

S&P 500

Among the S&P 500, 446 stocks were down on Thursday. Here are the 20 stocks with the biggest declines for the session:

Company

Ticker

Price change – Sept. 3

Price change – 2020

Price change – 2019

Qorvo Inc.

US:QRVO -9.8%

4.5%

91.4%

Nvidia Corp.

US:NVDA -9.3%

121.3%

76.3%

Fortinet Inc.

US:FTNT -9.0%

13.1%

51.6%

Skyworks Solutions Inc.

US:SWKS -8.7%

15.7%

80.4%

Zebra Technologies Corp. Class A

US:ZBRA -8.5%

5.4%

60.4%

Advanced Micro Devices Inc.

US:AMD -8.5%

80.0%

148.4%

Apple Inc.

US:AAPL -8.0%

64.7%

86.2%

DexCom Inc.

US:DXCM -7.8%

88.8%

82.6%

Cadence Design Systems Inc.

US:CDNS -7.7%

55.8%

59.5%

Campbell Soup Co.

US:CPB -7.5%

-1.8%

49.8%

Juniper Networks Inc.

US:JNPR -7.5%

-6.3%

-8.5%

Autodesk Inc.

US:ADSK -7.4%

32.0%

42.6%

West Pharmaceutical Services Inc.

US:WST -7.2%

77.8%

53.4%

Paycom Software Inc.

US:PAYC -7.0%

7.3%

116.2%

KLA Corp.

US:KLAC -6.6%

13.0%

99.1%

S&P Global Inc.

US:SPGI -6.5%

29.5%

60.7%

Albemarle Corp.

US:ALB -6.5%

27.6%

-5.2%

Synopsys Inc.

US:SNPS -6.4%

54.3%

65.2%

Microsoft Corp.

US:MSFT -6.2%

37.8%

55.3%

ServiceNow Inc.

US:NOW -6.2%

66.1%

58.6%

Source: FactSet

Nasdaq-100

The Nasdaq-100 Index
US:NDX
(The largest 100 non-financial stocks in the Nasdaq) lost 5.2% on Thursday, though it is still up 34.8% this year so far. Here are its 10 worst-performing components for the day:

Company

Ticker

Price change – Sept. 3

Price change – 2020

Price change – 2019

Zoom Video Communications Inc. Class A

US:ZM -10.0%

460.4%

N/A

Nvidia Corp.

US:NVDA -9.3%

121.3%

76.3%

MercadoLibre Inc.

US:MELI -9.1%

90.1%

95.3%

Tesla Inc.

US:TSLA -9.0%

386.5%

25.7%

DocuSign Inc.

US:DOCU -8.7%

226.6%

84.9%

Skyworks Solutions Inc.

US:SWKS -8.7%

15.7%

80.4%

Advanced Micro Devices Inc.

US:AMD -8.5%

80.0%

148.4%

Apple Inc.

US:AAPL -8.0%

64.7%

86.2%

DexCom Inc.

US:DXCM -7.8%

88.8%

82.6%

Cadence Design Systems Inc.

US:CDNS -7.7%

55.8%

59.5%

Source: FactSet



Original source link

Stock-market rout: Why it’s too early to call tech plunge the start of a correction


Big rallies often come to an ugly end — and that was certainly the case Thursday for tech stocks and other high-flying sectors that have benefited from momentum-driven waves of buying. But that doesn’t mean a full-fledged correction for the most popular stocks — or the broader market — is under way.

“It’s very difficult to say definitively that something that is up 28% on the year and up [more than 70%] from the bottom going down 4% is a sustainable correction,” said David Bahnsen, chief investment officer at Newport Beach, Calif.-based The Bahnsen Group, referring to the tech-heavy Nasdaq Composite Index
COMP,
-4.96%

COMP,
-4.96%
.
While a potentially brutal Nasdaq correction is likely inevitable, there’s no “formulaic” way to tell when one has started, he said in an interview.

Key Words: Is this ‘the beginning of the end?’ Billionaire Bill Ackman shares his thoughts on the big market retreat

By the close, the Nasdaq was down 5%. The S&P 500
SPX,
-3.51%

fell 3.5% and the Dow Jones Industrial Average
DJIA,
-2.77%

ended the day down more than 800 points, or 2.8%, after falling more than 1,000 points at its session low. The drop marked the biggest one-day percentage declines for all three benchmarks since June, and ended a four-day winning streak for the Nasdaq and a 10-day string of gains for the S&P 500 tech sector.

See:These were the biggest stock-market losers on Thursday as tech shares tanked

Warning signs abounded as technology shares kept pushing higher, market watchers said. Options volatility remained stubbornly high even as stocks continued to rally — a sign of nervousness — and tech valuations, while a poor guide to market timing, became increasingly stretched, said Fawad Razaqzada, analyst with ThinkMarkets, in a note.

Related:Tech stocks and the rest of the market are both very expensive — for 2 ‘completely different reasons’

Also, momentum indicators, such as the relative strength index, were at levels perceived as extremely overbought on major indexes, which meant that “even the most bullish speculators chasing momentum would have found it difficult to justify buying at such extreme levels,” he said.

The selloff could be an indication of things to come, “where fundamentals play a larger part in valuations, as opposed to the irrational exuberance that has persisted in recent months within tech,” said Peter Essele, head of portfolio management for Commonwealth Financial Network.

Essele said the lack of a broad selloff across all sectors showed that “hot money” had been chasing large tech names.

Indeed, the lack of heavier selling outside the most high-flying sectors pointed to signs of rotation, a positive sign for the overall market, Bahnsen said.

While the Dow fell more than 800 points, shares of JPMorgan Chase & Co.
JPM,
-0.31%
,
the world’s largest bank, declined only 0.3% and shares of Exxon Mobil Corp.
XOM,
-0.20%
,
the world’s largest oil company, lost only 0.2% after spending much of the day in the green. All 11 S&P 500 sectors fell, but energy shares lost only 0.6% and financials declined 1.6% — both are among the most out of favor in 2020, down nearly 43% and 19% year to date, respectively.

Down days where you see energy and financials holding up despite steep losses elsewhere indicates rotation, not capitulation, a bullish sign overall, Bahnsen said.

Also, in the era of heavy ETF ownership, when a fund needs to sell off Apple shares, shares of companies that don’t have organic selling pressure get pulled down with them, he said.

So now what? Friday’s session already carried the potential for volatility, coming ahead of a three-day holiday weekend and after investors get a look at the July jobs report.

Economic Preview: U.S. likely added 1.2 million jobs in August, economists say, but hiring has slowed

Investors might have second thoughts about technology shares at still-elevated levels, Razaqzada said, which could make for either increased rotation into lagging sectors, pushing tech stocks into a period of consolidation or beginning a proper correction.



Original source link