NEW YORK, Sept 3 — The S&P 500 and the Dow fell today as a slowdown in US jobs growth raised questions about the pace of the economic recovery, while the tech-heavy Nasdaq jumped as the report also calmed fears of an imminent tapering in monetary policy.
Eight of the 11 S&P sectors were down in morning trading, with real estate and utilities stocks leading declines.
Banking stocks, which generally perform better when bond yields are higher, dropped 0.1 per cent even as the benchmark 10-year Treasury yield jumped following the report.
“The number’s a big disappointment and it’s clear the Delta variant had a negative impact on the labour economy this summer,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
“You can tell because leisure and hospitality didn’t add any jobs and retail actually lost jobs. It suggests areas that are highly sensitive to the pandemic suffered as the Delta variant surged.”
The S&P 500 and the Nasdaq had scaled all-time highs over the past few weeks on support from robust corporate earnings, but investors had recently grown cautious on hawkish signals from the Federal Reserve and the jump in infections.
The labour market remains the key touchstone for the Fed, with Chair Jerome Powell hinting last week that reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases.
Today, the Labour Department’s closely watched report showed nonfarm payrolls increased by 235,000 jobs in August, widely missing economists’ estimate of 750,000. Payrolls had surged 1.05 million in July.
At 10.25am ET, the Dow Jones Industrial Average was down 61.21 points, or 0.17 per cent, at 35,382.61, the S&P 500 was down 4.77 points, or 0.11 per cent, at 4,532.18, and the Nasdaq Composite was up 19.31 points, or 0.13 per cent, at 15,350.48.
Technology heavyweights, including Apple, Alphabet, and Facebook, rose as much as 0.4 per cent. Tech stocks tend to perform better in a low interest-rate environment.
Chinese ride-hailing firm Didi Global gained 6.0 per cent after a media report that the city of Beijing was considering moves that would give state entities control of the company.
Biotechnology firm Forte Biosciences slumped 81.1 per cent to be among the top decliners across US exchanges after its experimental treatment for eczema, a skin disease, failed to meet its main goal.
Declining issues outnumbered advancers for a 1.67-to-1 ratio on the NYSE and a 1.36-to-1 ratio on the Nasdaq.
The S&P index recorded 26 new 52-week highs and one new low, while the Nasdaq recorded 70 new highs and 11 new lows. — Reuters