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Tech drives Nasdaq to record finish but Wall Street mixed on jobs report

EconomySep 03, 2021 06:50PM ET
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© Reuters. A person waits on the Wall Street subway platform in the Financial District of Manhattan, New York City, U.S., August 20, 2021. REUTERS/Andrew Kelly

By David French

(Reuters) - The Nasdaq ended Friday at a new peak but the other main Wall Street indexes fell, reflecting the mixed sentiment stemming from a disappointing U.S. jobs report which raised fears about the pace of economic recovery but weakened the argument for near-term tapering.

On the final day of trading before the Labor Day weekend, both the S&P 500 and Dow benchmark posted marginal declines, tempering the former's positive weekly performance and extending the latter's run of losses to four in the last five sessions.

For the Nasdaq though, registering a fifth win in the last six sessions and a weekly gain of 1.6%, investors' support of heavyweight technology stocks - which tend to perform better in a low interest-rate environment - continues to drive it higher.

Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), and Facebook (NASDAQ:FB) all rose between 0.3% and 0.4%.

"Tech has become bullet-proof," said Mike Mullaney, director of global market research at Boston Partners.

"It's the anti-COVID sector, where you want to be if you think COVID or a lack of growth is going to be an issue."

The virus, and its impact on the pace of economic recovery, was evident in the Labor Department's closely-watched report which 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.

"The number's a big disappointment and it's clear the Delta variant had a negative impact on the labor economy this summer," said Michael Arone, chief investment strategist at State Street (NYSE:STT) Global Advisors in Boston.

"You can tell because leisure and hospitality didn't add any jobs and retail actually lost jobs. Investors will conclude that perhaps this will put the (Federal Reserve) further on hold in terms of the timing of tapering. Markets may be okay with that."

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 have remained generally cautious as they watch economic indicators and the jump in U.S. infections to see how that might influence the Fed and its tapering plans.

The labor 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.

Among the biggest decliners on the S&P 500 were cruise ship operators, whose businesses are highly susceptible to consumer sentiment around travel and COVID-19. Norwegian Cruise Line (NYSE:NCLH) Holdings, Carnival (NYSE:CUK) Corp and Royal Caribbean (NYSE:RCL) Cruises all fell between 3.4% and 4.4%.

A majority of the 11 S&P sectors closed down, with the utilities index the worst performer at 0.8% lower. Economically-sensitive manufacturing and industrials slipped 0.7% and 0.6% respectively.

Banking stocks, which generally perform better when bond yields are higher, dropped 0.4% even as the benchmark 10-year Treasury yield jumped following the report. [US/]

"I get the overall market reaction, because it feels a little bit like pricing in a potential policy error from the Fed, but I don't understand some of the sectors' reactions today," said Boston Partners' Mullaney.

Despite a Labor report number well outside the consensus estimate, the overall reaction of investors was muted, continuing a trend over the last year of a decoupling of significant S&P movement in the wake of a wide miss on the payrolls report.

The S&P 500 lost 1.52 points, or 0.03%, to 4,535.43 and the Dow Jones Industrial Average fell 74.73 points, or 0.21%, to 35,369.09. The Nasdaq Composite added 32.34 points, or 0.21%, to 15,363.52.

For the week, the S&P rose 0.6% and the Dow dipped 0.2%.

Volume on U.S. exchanges was 8.37 billion shares, compared with the 8.99 billion average for the full session over the last 20 trading days.

The S&P 500 posted 50 new 52-week highs and one new low; the Nasdaq Composite recorded 123 new highs and 21 new lows.

Tech drives Nasdaq to record finish but Wall Street mixed on jobs report
 

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Comments (23)
Ahsan Habib
Ahsan Habib Sep 04, 2021 7:41AM ET
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Jokers R Us
Jokers R Us Sep 03, 2021 8:39PM ET
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Who is surprised by this? This government seems *****bent on destroying our economy and making us more dependent on them.
New Jazenevd
New Jazenevd Sep 03, 2021 7:03PM ET
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Economy goes from bad to awful. Market goes from one record to another. Any contradiction here? Nope. This is the most logical result of runaway money printing.
Jokers R Us
Jokers R Us Sep 03, 2021 7:03PM ET
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We know. You guys need to stop spamming this. Fundamentals haven’t mattered for decades.
Phong Trịnh
Phong Trịnh Sep 03, 2021 6:42PM ET
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helo
Phong Trịnh
Phong Trịnh Sep 03, 2021 6:42PM ET
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helo
Tommy Rommazontz
Tommy Rommazontz Sep 03, 2021 6:12PM ET
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The value of stocks are no higher than a year ago. What you see reflected in stock prices is asset inflation caused by a devalued dollar. As long as the printers stay on, it will continue. Don't be looking for any meaningful corrections until the printers actually slow down. That just financial gravity at play.
JAMES CUNHA
JAMES CUNHA Sep 03, 2021 5:02PM ET
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I am confused with the Fed's position relating to asset purchases. If the Delta Variant is being blamed for the low payroll for August, shouldn't the Fed's asset purchases have assisted?  The whole excuse no longer adds up. COVID is not going away anytime soon. It may actually occur each year similar to the flu. Is the Fed going to continue spending $120 billion each month to buy bonds and mortgage back securities every year?  It is obvious that the Fed's asset purchases doesn't really impact employment.  As the Fed Chair previously stated, people have learned to adapt to having COVID around. Other than further inflating the equity and housing markets, I am not sure why the Fed hasn't tapered its asset purchases.
Tiberius Augustus
Tiberius Augustus Sep 03, 2021 5:02PM ET
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They not printing for employment but for buybacks . The fed can’t solve covid like you imply hence they are creating money for the rich . There is an argument for unemployment benefits
Mitchel Pioneer
Mitchel Pioneer Sep 03, 2021 4:33PM ET
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More criminal pumping of the NASDAQ,  with losses on the DOW and S&P whisked away intraday, unlike the tightrope-walk "rallies" where the sellers miraculously vanish.  Hope you assumed the proper position for the holiday weekend America.
Amos Zutah
Amos Zutah Sep 03, 2021 4:13PM ET
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Am new hear I need help
Kenton Jenkins
Kenton Jenkins Sep 03, 2021 4:13PM ET
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what do you need?
Kenton Jenkins
Kenton Jenkins Sep 03, 2021 4:13PM ET
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what do you need?
Kenton Jenkins
Kenton Jenkins Sep 03, 2021 4:13PM ET
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what do you need?
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Sep 03, 2021 3:57PM ET
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the show is over. it is time to go home. back to West Virginia
Gershom Zvi
Gershom Zvi Sep 03, 2021 3:35PM ET
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If Dems don’t dismiss Powell da stock market will be more or less ok if dems fired him we will see da crash of the market
Glenn Ebersole
Glenn Ebersole Sep 03, 2021 2:39PM ET
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Economy in the toilet but buyers care less.
Stan Smith
Stan Smith Sep 03, 2021 2:39PM ET
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No one cares about the economy so long as Wall St can profit and cash in at the casino..sad and Main St will be on the hook again when it implodes
marcus daily
marcus daily Sep 03, 2021 2:39PM ET
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The economy is not in the toilet?  lol.  There is cash on the sidelines waiting to be invested by investors, these highs show that,, these current earnings statements show this economy is ready to move forward.  It is funny how Biden today blamed the dismal job numbers due to the pandemic.  The truth is his administration's and liberal congress' continual feeding cushy unemployment to the selfish who dont want to work.  Cut off the free money / entitlements and people will go back to work, production , logistic issues, supply / demand will return to normal.  Also, China is about to spin up its demand and production.
Mark Stallone
Mark Stallone Sep 03, 2021 2:19PM ET
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RELAX. High inflation, open southern border, high gas prices, ******run Afghanistan.. It's all part of Building Back "Better".
Dave Jones
Dave Jones Sep 03, 2021 2:19PM ET
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I'd hate to see what worse would look like!
Mark Stallone
Mark Stallone Sep 03, 2021 2:19PM ET
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Dave Jones Oh we'll see soon enough.
Jokers R Us
Jokers R Us Sep 03, 2021 1:36PM ET
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-50 pts is a slip lmfao....negative rates forever stocks and inflation are bullish.
Leon Kelly
Leon Kelly Sep 03, 2021 1:11PM ET
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looks like the same money rotating from cyclicals back into tech that fled tech yesterday... musical chairs
Bear Bull
Bear Bull Sep 03, 2021 1:11PM ET
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so they left tech yday and went back today? that doesnt sound like they have good analysts going back and forth on indexes
Mitchel Pioneer
Mitchel Pioneer Sep 03, 2021 1:08PM ET
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The biggest investment JOKE in the won't give up its "gains," but every single loss is met with intraday interference, as another magic show unfolds, with the curtain rising at 10AM, predictable as the sunrise.  Assume the position of the weekend, as the US Ponzi Scheme just can't post a loss, clearly cementing it in history as the greatest financial fraud in the world.
St Af
St Af Sep 03, 2021 1:00PM ET
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Yesterday, did car and trucks sales make the NEWS?Truck sales were lower 4 months in a row..lowest since March- April 2020...you know ! CHEERS!!7
Carrascal Eduardo
Edouard Sep 03, 2021 12:35PM ET
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The English-speaking media, and consequently the markets, have been too optimistic about the post-Pandemic recovery (mainly in the USA, also in the EU). Powel was, and is right with his wait and see Monetary Policy strategic mode. Too pessimistic, too far, with the influence of XI's control measures on Chinese stocks, with clearly exaggerated losses of 50% and beyond. And we are in, if not close to the moment of truth, when a Democratic Senator, Joe Manchin, lacks the necessary vision with Biden's plans. He rarely achieves Glory on an emergency basis by not being a true progressive and a lousy traveling companion, dear Joe. What a pity !
NUNO LOUREIRO
NUNO LOUREIRO Sep 03, 2021 12:32PM ET
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If jobs growth slowed... How came the unemployment rate is down 0.2% from previous month??
Stan Smith
Stan Smith Sep 03, 2021 12:32PM ET
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Job numbers are a complete Fudge Fest. No ones buying the facade anymore..its all lies to keep the Bankers pockets full
Steffen vdm
Steffen vdm Sep 03, 2021 12:32PM ET
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it's still growing, but only slowly
Stan Smith
Stan Smith Sep 03, 2021 12:11PM ET
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Yesterday Job news was great...a day later not so much. LOL
ben sc
ben sc Sep 03, 2021 11:57AM ET
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great spin, this isn't actually job growth when it doesn't outpace jobless claims. also, missing by 500k jobs.....and retail losing jobs. this should trigger a huge sell-off as it must impact q2 earnings.
noob investor
noob investor Sep 03, 2021 11:37AM ET
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manipulated market.
Jouni Matero
Jouni Sep 03, 2021 11:28AM ET
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Tech stocks are lifted by fraud manipulation by hedge funds and banks algos, otherwise tech would go down the drain
Jokers R Us
Jokers R Us Sep 03, 2021 11:28AM ET
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don't forget free Fed cash
 
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