- Grim August jobs report allays fears
- Leisure, retail employment is disappointing; cruise ships collapse
- Bank stocks slip and ignore rising bond yields
Sept. 3 (Reuters) – The Nasdaq closed on a new high on Friday, but major Wall Street indices headed mixed for Labor Day weekend, reacting to a disappointing employment report in the United States which raised fears of the pace of the economic recovery but weakened the argument in favor of short-term degression.
A majority of the 11 S&P sectors finished lower, with the energy (.SPNY) and financial (.SPSY) indices among those finishing in the red.
Bank stocks (.SPXBK), which typically perform best when bond yields are higher, fell even as the benchmark 10-year Treasury yield surged after the report.
“This number is a big disappointment and it’s clear that the Delta variant has had a negative impact on the labor economy this summer,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
“You can tell because the leisure and hospitality industry has not created any jobs and the retail business has in fact lost jobs. Investors will conclude that maybe this will put the (Federal Reserve) on hold further. terms of reduction schedule. Markets can agree to that. “
Among the biggest declines of the S&P 500 were cruise ship operators including Norwegian Cruise Line Holdings (NCLH.N), Carnival Corp (CCL.N) and Royal Caribbean Cruises (RCL.N), whose businesses are very sensitive. consumer sentiment around travel and COVID-19.
The S&P 500 and Nasdaq had hit all-time highs in recent weeks on support from robust corporate earnings, but investors have remained generally cautious as they monitor economic indicators and the surge in US infections for see how that might influence the Fed and its tapered plans.
The job market remains the key touchstone for the Fed, with President Jerome Powell hinting last week that achieving full employment is a prerequisite for the central bank to start cutting back on asset purchases.
The closely watched Labor Department report on Friday showed non-farm payrolls increased by 235,000 jobs in August, largely missing economists’ estimate of 750,000. Payroll had jumped 1.05 million in July. Read more
Despite a number well outside the consensus estimate, the overall investor reaction has been subdued, continuing a trend over the past year of significant S&P decoupling following a large error in the salary report. Read more
Unofficially, the Dow Jones Industrial Average (.DJI) fell 74.47 points, or 0.21%, to 35,369.35, the S&P 500 (.SPX) fell 1.41 points, or 0.03% , at 4,535.54 and the Nasdaq Composite (.IXIC) added 32.34 points. , or 0.21%, to 15,363.52.
The Nasdaq, posting a fifth daily gain over the past six sessions, was boosted by tech heavyweights including Apple (AAPL.O), Alphabet (GOOGL.O) and Facebook (FB.O). Tech stocks tend to perform better in a low interest rate environment.
Chinese ridesharing company Didi Global (DIDI.N) won after a media report that the city of Beijing was considering measures that would give state entities control of the company. Read more
Biotech company Forte Biosciences (FBRX.O) collapsed after its experimental treatment for eczema, a skin disease, failed to achieve its primary goal.
Reporting by Shashank Nayar in Bengaluru and Stephen Culp and David French in New York; Editing by Arun Koyyur and Marguerita Choy
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