Dow Cuts Losses as Apple Rebound Helps Tech Stem Bleed

This post was originally published on this site – The Dow fell on Friday led by a rout in tech as a mixed jobs report raised concerns about the pace of the recovery at a time when lawmakers appear no closer to breaking the deadlock on a new round of fiscal stimulus.

The Dow Jones Industrial Average fell 1.29%, or 363 points. The S&P 500 was down 1.60%, while the Nasdaq Composite slipped 2.59% .

Nonfarm payrolls grew by 1.37 million last month, just below expectations of a 1.4 million, the Bureau of Labor Statistics reported Friday. But the unemployment rate fell to 8.4% from 10.2%, a sharper contraction than the 9.8% expected.

While the headline number was under consensus, a deeper dive into the report flagged concerns about the labor market as the gains were led by the hiring of government employees, while the private sector remains sluggish.

Private employers rehired just 1 million workers, and have recovered less than half the jobs lost in March and April.

Stifel Economics, however, suggested the report pointed to improving momentum in the labor market, which could “could alleviate pressure on the White House and Democratic leaders to restart stimulus negotiations, which have reportedly been stalled over the size and scope of the potential package.”

With doubts growing over the pace of the recovery, investors cut their bullish bets on big tech for a second-straight day.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) the so-called Fab 5, which make up for about 25% of the S&P 500, fell sharply.

Philadelphia Semiconductor Index also contributed to the selloff, falling 2%, though Broadcom (NASDAQ:AVGO) managed to sidestep the weakness after reporting better-than-expected quarterly guidance and earnings late Thursday.

A rise in financials, however, helped stem the sea of the red on Wall Street, with JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS) trading in the green.  

Elsewhere on the earnings front, Docusign slumped 11% despite reporting second-quarter earnings more than double consensus.  

Smith & Wesson Brands (NASDAQ:SWBI) also reported earnings and revenue that markedly topped analysts’ estimates but saw its shares slip more than 4%.

In merger news, Just Eat Takeaway said it had received all necessary regulatory approvals for its $7.3 billion merger with Grubhub, and expects the deal to be completed in the first half of 2021. Grubhub Inc (NYSE:GRUB) was down about 0.6%.