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S&P 500 Slips on Tech Wreck After November Job Gains Fall Short

Stock MarketsDec 03, 2021 02:51PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 fell Friday, after data showed job gains fell well short of estimates in November at time when concerns about the impact of Omicron on economic growth continue to dominate investor sentiment.  

The S&P 500 fell 1.5%, the Dow Jones Industrial Average slipped 0.76%, or 261 points, the Nasdaq fell 2.5%.

“It was a colossal miss,” Darren Schuringa, CEO of ASYMmetric ETFs said in an interview with Investing.com on Friday, referring to weaker-than-expected job gains in November. “When I look at these numbers now, it is concerning for me from an economic strength standpoint.”

Nonfarm payrolls increased 210,000 in November, well below economists’ expectations for 550,000 new jobs.

Still, a deeper dive into the monthly jobs report pointed to signs of the strength in the labor market. The unemployment rate fell more than expected to 4.2% as the labor force participation rate rose 0.2% to 61.8% last month.  

While the weakness in hiring “could complicate the discussion at the Federal Reserve … [Fed] officials seem to be leaning toward faster monetary policy normalization in response to high inflation,” Desjardins said in a note.

Technology stocks were among the hardest hit, with Microsoft leading the selloff in big tech.

Microsoft  (NASDAQ:MSFT) fell nearly 3%, while Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB), and Google-parent Alphabet (NASDAQ:GOOGL) were down 2%.

Chip stocks also exacerbated the selling in the broader tech as Nvidia (NASDAQ:NVDA) slipped more than 5% after the Federal Trade Commission sued to block its proposed $40 billion takeover of chipmaker ARM Holdings (LON:ARM), citing competition concerns.

“[W]e see the FTC's decision to sue to block the deal as almost certainly ending the chances of any acquisition,” Wedbush said in a note.

DocuSign (NASDAQ:DOCU), meanwhile, plunged 40% after its softer fourth-quarter guidance suggested the e-signature company is unlikely to sustain its pandemic-fueled growth.

In other news, Peloton Interactive  (NASDAQ:PTON) gave up earlier gains and followed the market lower despite Deustche Bank issuing a buy rating on the stock amid expectations that a hybrid approach to fitness – at home and at the gym – is a possibility.

“[W]e think the hybrid work model extends to fitness, too, and that PTON [Peloton] has plenty of momentum to regain operationally,” Deutsche Bank said in a note.

Financials, meanwhile, were pushed lower by a slump in banks as the Treasury yields fell sharply, with the 10-year yield falling below 1.4%.

SVB Financial (NASDAQ:SIVB), First Republic (NYSE:FRC), Citizens Financial (NYSE:CFG) were among the hardest hit regional banks as falling yields tend to keep a lid on net interest income generated by banks.

The slump in Treasury yields come as investors flag concerns about the outlook for the economy as the Fed appears ready to step up monetary policy tightening at a time when the new omicron variant could threaten growth.

Yet, if the new variant turns out to be less impactful than feared and supply chain woes continue to ease, the broader market could resume its trend higher. 

"If the borders remain open, and supply chain [problems] continue to unravel, then that would support the markets moving higher from here," Schuringa said.

S&P 500 Slips on Tech Wreck After November Job Gains Fall Short
 

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Comments (8)
Franco Dominguez
Franco Dominguez Dec 04, 2021 10:20PM ET
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Lina KHAN (FTC) where is that lastname coming from??? India, China, Russia (mongolia) reason she is ********out usa companies
Dave Jones
Dave Jones Dec 03, 2021 4:15PM ET
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nice pie face
Robin Hood
RobinHdJr Dec 03, 2021 4:15PM ET
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Sure we have 4.2% unemployment. The ideal rate is between 3 and 4 percent, so not sure why this is even a topic of conversation. Meanwhile, FED target for inflation is 2%, and we are currently sitting at 6.2%. So triple the target inflation, and the news media and Wall Street is fussing about irrelevant unemployment rates?  Skip my numbers. Skip the news. Look at your own town. Do you see any help wanted signs? Are gas prices low or elevated? What does common sense tell you the bigger problem is right now - - inflation or unemployment?
Dave Jones
Dave Jones Dec 03, 2021 4:15PM ET
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word bruh word....
Nkechi Christian
Nkechi Christian Dec 03, 2021 4:15PM ET
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join us in our link
Nkechi Christian
Nkechi Christian Dec 03, 2021 4:15PM ET
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I have a better platform were you can invest
Nkechi Christian
Nkechi Christian Dec 03, 2021 4:15PM ET
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you can join sir Dan Morehead he has been a good broker
Mitchel Pioneer
Mitchel Pioneer Dec 03, 2021 4:02PM ET
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Hopefully America assumed the proper position for the weekend.  Another financial Friday knife in the back of the US working class heading into a weekend.  It's one miracle after another for the greatest financial fraud in the world.
Stan Smith
Stan Smith Dec 03, 2021 3:49PM ET
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Ruh Roh.... Bank of America: This Is The Top
Nkechi Christian
Nkechi Christian Dec 03, 2021 3:49PM ET
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Mitchel Pioneer
Mitchel Pioneer Dec 03, 2021 3:22PM ET
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And here comes the predictable Friday FRAUD, as another "late trade" miracle unfolds.  Welcome to the biggest investment JOKE in history.
Stan Smith
Stan Smith Dec 03, 2021 3:22PM ET
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Yep up we go...love these free markets. Now about that tapering?
Iam Suleman
YesomiteSam Dec 03, 2021 3:20PM ET
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More than anything else, it's Omicron and the uncertainty surrounding the effectiveness of vaccines to combat it is driving the market.  If there was some positive news about Omicron, we would not see tech bloodbath with Treasury yields down sharply
Marco cuevas
Marco cuevas Dec 03, 2021 3:11PM ET
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And the racket continues.
 
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