A modest rebound in technology-and-internet related shares Friday morning helped stock benchmarks trim early losses scored after August employment data showed healthy wage growth and hiring.
The jobs data was seen bolstering the case for the Federal Reserve lifting interest rates later this month. Wall Street has been beset by a number of issues seen as risk factors for stocks’ longer-term uptrend, including concerns on international trade policy, and a downdraft in emerging economies.
Where are the major benchmarks trading?
The Dow Jones Industrial Average DJIA, -0.05% traded 34 points, or 0.1%, lower at 25,958, after sinking by tripled-digits near Friday’s open. The S&P 500 index SPX, +0.11% gained less than a point to 2,877, in bumpy early action, while the Nasdaq Composite Index COMP, +0.46% rose 34 points, or 0.5% at 7,958, after opening with a firmer loss and flirting with its worst weekly skid since March 23.
The S&P 500 and the Nasdaq have declined in the past three sessions. On Thursday, stocks fell for a third straight session, pressured by ongoing weakness in technology stocks.
For the week, the Dow is on pace to end mostly flat, the S&P 500 is on track to slide by 0.7%, while the Nasdaq is set for a 1.9% fall, according to FactSet data.
What’s driving markets?
In the latest economic data, 201,000 jobs were added in the month of August, slightly better than what had been expected by analysts. The unemployment rate held steady at 3.9%. Separately, the jobs reports for both June and July were revised lower.
Investors also focused on the most recent developments surrounding trade after it was reported that the prospect of resolving the U.S. trade battle with China was fading as the White House draws closer to a deal to revise the North American Free Trade Agreement.
The technology sector remains in focus following several days of protracted weakness. The sector has dropped 2.6% so far this week. Among the major decliners, Microsoft Corp. MSFT, -0.06% has shed 3.2% thus far this week, while Google-parent Alphabet Inc. GOOGL, -0.01% GOOG, +0.01% has dropped 3.9%. Facebook Inc. FB, +0.86% has been among the biggest decliners, off 7.5%.
See: Should stock-market investors start worrying about the tech wreck?
Also read: ‘Tech wreck’ is not what will end this bull market
What are market experts saying?
“With today’s jobs numbers, we’re back to our regularly scheduled program. July’s disappointment may have been an outlier as our economy is humming along at full speed,” wrote Mike Loewengart, vice president, investment strategy at E-Trade Financial Corp.
“Strong jobs numbers plus continued strength from economic fundamentals, and a market coming off a winning streak all portend for a positive end to Q3,” he said.
“The interpretation of that [jobs report] is that inflation is potentially building up in the economy, driven by the wage growth,” said Ernesto Ramos, head of equities for BMO Global Asset Management.
“It’s the strength of the wage-growth number that’s driving us down today. I think this bakes in the idea of four rate hikes this year, which is not good for the market. Overall this gives a higher probability of more rate hikes over the coming year,” he told MarketWatch.
“The tech weakness and trade do concern me to a degree. You don’t have a good market if tech isn’t a leader, and there’s no doubt that tariffs and weakness in China could become a bigger concern if the issue starts to spill out over into the U.S. more,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services.
Kaufman added that the jobs report was strong, but to a degree that “it increases the odds of the Federal Reserve being hawkish and continuing on their path of raising rates. That could make it a difficult day for equities, as rising bond yields will have a slightly negative effect on stock valuations in the short term.”
What stocks are in focus?
Alibaba Group Holding Ltd. BABA, +2.30% shares rose 2% after it announced a stock-buyback program.
Hedge-fund manager Daniel Loeb said Friday that he is planning to seek to replace the entire board at Campbell Soup Co.’s CPB, +0.25% coming annual shareholder meeting. The company’s shares were off 0.1%.
Oppenheimer analyst Noah Kaye started research coverage of Caterpillar Inc. CAT, +0.23% with a neutral rating, saying an upbeat outlook on management’s ability to mitigate earnings volatility is offset by valuation that is a bit rich. Shares of the industrials-equipment giant were down 0.2%.
The Michaels Cos. Inc. MIK, +5.74% approved a stock-buyback program of $500 million. Shares were up 4.9%.
Tesla Inc. shares TSLA, -6.25% were down 5.4%, but cutting steeper losses for the company amid a series of unsettling developments. The electric-car maker’s Chief Accounting Officer Dave Morton resigned on Sept. 4, roughly a month after joined Tesla, according to a regulatory filing published Friday. Separately, Chief Executive Elon Musk appeared to smoke marijuana during an interview on “The Joe Rogan Experience” podcast.
Shares of Roku Inc. ROKU, +2.88% rose 3.3%, putting the media-streaming company on track to close at a record. The stock hit a fresh all-time high of $65.94 in Friday trade.
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