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Late Wall Street rally falls short as dismal jobs data sinks Bank stocks

Published 06/03/2016, 04:17 PM
Updated 06/03/2016, 04:32 PM
The Dow, NASDAQ and S&P 500 all fell mildly on Friday

The Dow, NASDAQ and S&P 500 all fell mildly on Friday

Investing.com -- U.S. stocks pared sharp losses late in Friday's session after a disappointing domestic jobs report for the month of May dampened investors sentiment for a June interest rate hike from the Federal Reserve.

On Friday morning, the U.S. Department of Labor's Bureau of Labor Statistics (BLS) said nonfarm payrolls in May rose by 38,000, less than a quarter of analysts' expectations for monthly job gains of 158,000. It marked the slowest monthly job growth since September, 2010, and triggered alarm bells on the broader strength of the U.S. economy. Shortly after, billionaire real estate mogul Donald Trump, the presumptive Republican nominee for the 2016 U.S. presidential election, called the surprising figure a "bombshell."

The Dow Jones Industrial Average lost 31.50 or 0.18% to 17,807.06, while the NASDAQ Composite index fell 28.84 or 0.58% to 4,942.52, halting a seven-day winning streak. At session-lows, the Dow dropped by as much as 148 points. The S&P 500 Composite index, meanwhile, dipped by 6.13 or 0.29% to 2,099.13, as six of 10 sectors closed in the red. Stocks in the Financials sector lagged, while stocks in the Utilities industry led. Stocks in the Utilities sector, which are generally viewed as interest rate-sensitive investments, soared by more than 1.5% on the session.

On the other hand, the SPDR XLF Financial Sector ETF tumbled more than 1% as yields on the U.S. 10-Year plunged 11 basis points to an intraday-low of 1.697%, their lowest level in three weeks. Yields on 10-year U.S. Treasuries have crashed approximately 50 basis points since the Fed raised short-term interest rates in mid-December.

Consequently, top financial stocks on Wall Street fell precipitously as the prospect of a delayed rate hike intensified concerns of declining profits in the fixed income business. Shares in Goldman Sachs Group Inc (NYSE:GS), the worst performer on the Dow, fell 3.61 or 2.27% to 155.67. In total, losses from Goldman Sachs, AXP and JPM shaved roughly 40 points off the Dow. The top performer was Caterpillar Inc (NYSE:CAT), which added 1.42 or 1.93% to 75.04. Caterpillar, the world's largest manufacturer of construction equipment, received a boost from a 2% surge in gold prices on the session.

The biggest gainer on the NASDAQ was Broadcom (NASDAQ:AVGO), which jumped 7.97 or 5.14% to 162.88 after the California-based semiconductor company topped analysts' quarterly earnings forecasts and hiked their dividend on Friday. Broadcom sales continue to surge in anticipation of AAPL's iPhone 7 launch later this fall. The worst performer was Jd.Com Inc Adr (NASDAQ:JD), which lost 0.76 or 3.21% to 22.90. Shares in the Chinese e-commerce website fell by roughly 7% on the week, due primarily to weak manufacturing data in Asia.

The top performer on the S&P was Newmont Mining Corporation (NYSE:NEM), which soared 3.08 or 9.52% to 35.43. Shares in Newmont Mining (NYSE:NEM) popped on Friday, as Gold erased two weeks of losses with its massive surge. The worst performer was The Charles Schwab Corporation (NYSE:SCHW), which fell 1.58 or 5.12% to 29.26. A host of top financial stocks also struggled on Friday, as Bank of America Corporation (NYSE:BAC), Citigroup Inc (NYSE:C) and E-TRADE Financial Corporation (NASDAQ:ETFC) all fell by more than 3%.

On the New York Stock Exchange, advancing issues outnumbered declining ones by a 1,637-1,398 margin.

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