Investing.com -- U.S. stocks fell precipitously on Friday, amid a romp in technology stocks and the release of a relatively optimistic U.S. jobs report, which increased the possibility that the Federal Reserve could increase the pace of its tightening cycle this year.
A modest increase in nonfarm payrolls for the month of January masked an otherwise strong January employment report, when average hourly earnings surged to their highest monthly level in a year and the unemployment rate dropped to 4.9%, its lowest rate since February, 2008. The unexpected wage gains could boost sluggish inflation and strengthen the case for the Fed to raise interest rates a handful times this year.
The Dow Jones Industrial Average fell 211.75 or 1.29% to 16,204.83, while the NASDAQ Composite index crashed 146.42 or 3.25% to 4,363.14, as its IBB Biotechnology Index plummeted as much as 4% on the session. LinkedIn Corporation (N:LNKD) plunged nearly 45%, wiping out approximately $11 billion in market capitalization, after the social networking site for professionals finished with slumping revenues and offered weak forecasts with its fourth quarter results. With the sharp declines, the NASDAQ nearly fell to its lowest level since September, 2014.
The S&P 500 Composite index, meanwhile, lost 35.43 or 1.85% to 1,880.02, as eight of 10 sectors closed in the red. Stocks in the Technology, Consumer Services and Energy sectors lagged, each falling by more than 2% on the session. Stocks in the Utilities and Telecommunications industries led. For the week, the S&P 500 tumbled by more than 3% extending considerable losses from the start of the year.
Any rate hikes by the Fed this year are viewed as bearish for U.S. equities, as investors exit their positions and pile into Treasuries and other bonds in an effort to capitalize on higher yields.
The top performer on the Dow was Merck & Company Inc (N:MRK), which added 0.79 or 1.63% to close the week at 49.38. Shares in the pharmaceutical giant rebounded on Friday, two days after the company offered a cautious full-year outlook for 2016 amid fears of lagging sales among its top performing drugs. The worst performer was Nike Inc (N:NKE), which tumbled 3.00 or 4.99% to 57.17. Shares in the athletic apparels giant are down nearly 15% from their four-month high in November when they traded above $67. Nike (N:NKE) was victimized on Friday by a growing trend from investors to abandon high-valuation stocks in favor of smaller-caps with stronger dividend yields.
The biggest gainer on the NASDAQ was Symantec Corporation (O:SYMC), which added 0.58 or 3.00% to 19.76. Shares in the California-based semiconductor company are still down nearly 25% over the last year. The worst performer was TripAdvisor Inc (O:TRIP), which lost 5.47 or 8.57% to 58.34. A trio of prominent companies also weighed on the NASDAQ, as Facebook Inc (O:FB), Amazon.com Inc (O:AMZN) and Netflix Inc (O:NFLX) all closed down by more than 5%.
The top performer on the S&P 500 was Tyson Foods Inc (N:TSN), which surged 5.04 or 9.70% to 56.99. Shares in Tyson Foods jumped on Friday after the nation's largest meat processor reported stronger than expected earnings, amid declining costs. The worst performer was Hanesbrands Inc (N:HBI), which slumped 4.43 or 15.07% to 24.96. On Thursday after the close, Hanes reported weaker than expected quarterly earnings amid poor international sales and weaker than expected online traffic growth.
Elsewhere, crude futures fell more than 2% on Friday to close the session near $30 a barrel. Crude prices have slid more than 70% over the last 18 months, dragging down oil, natural gas and drilling stocks.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,332 to 720 margin.