Stocks fall anew after worst selloff since June; investors eye jobs report

Stocks fell Friday, extending declines after a selloff a day earlier led the S&P 500 to its worst single-session drop in nearly three months. Early Friday morning, the Labor Department’s August jobs report showed more payroll gains than expected last month, and an unemployment rate that improved by a greater than expected margin.

AAPL) shares slumped again after an 8% drop on Thursday. Amazon (AMZN) and Zoom Video Communications (ZM) – both darlings of the “stay at home” trade in recent months – extended losses from Thursday as well.” data-reactid=”17″The Nasdaq underperformed and fell another 3.3% intraday Friday as tech stocks continued to lag. The index on Thursday had dipped back below 12,000, after crossing that threshold for the first time every just a day earlier. Apple (AAPL) shares slumped again after an 8% drop on Thursday. Amazon (AMZN) and Zoom Video Communications (ZM) – both darlings of the “stay at home” trade in recent months – extended losses from Thursday as well.

“Thursday’s mini-crash left the door open for more selling, and investors have rushed through it today in a hurry to take profits before more downside arrives,” Chris Beauchamp, chief market analyst at IG, said in a note. “If there is to be a crash, then the end of the first week in September, following non-farms and ahead of a long weekend in the US, is probably the perfect time to do it.”

Over the past couple months, a number of market pundits had warned of frothiness in the markets and crowding in tech stocks especially, as investors sought haven in software stocks during the pandemic.

“A sudden sell-off in tech may raise some red flags, but sector rotation is a good thing,” Rick Swope, senior director of investor education for E-Trade Financial Corporation, said in an email Thursday. “While adding breadth to the market, dedicated traders may benefit from seeking opportunities outside of overbought names.”

in fact topping expectations Thursday morning, and developments around a coronavirus vaccine candidate coming in increasingly constructively. Friday’s August jobs report from the US Labor Department showed better than expected but moderating gains in net payrolls relative to earlier months in the summer. It also showed the first unemployment rate below 10% since March.” data-reactid=”25″Thursday’s plunge came in absence of a clear external catalyst, with newly released data on weekly jobless claims in fact topping expectations Thursday morning, and developments around a coronavirus vaccine candidate coming in increasingly constructively. Friday’s August jobs report from the US Labor Department showed better than expected but moderating gains in net payrolls relative to earlier months in the summer. It also showed the first unemployment rate below 10% since March.

“Most signs still point to an economic recovery. But there are a lot of obstacles between now and the end of the year: Stimulus uncertainty, budget negotiations, presidential debates, corporate conferences, and the election,” said Lindsey Bell, Chief Investment Strategist for Ally Invest. “The next few months could be a bumpy ride.”

CCL) rose 5% and added to gains in pre-market trading, after the company said it would be resuming some cruise operations under its Costa brand this weekend, with the announcement bringing some other peer cruise and travel stocks higher in sympathy.” data-reactid=”27″Some of the more downtrodden names for the year to date so far managed to stay in positive territory during Thursday’s session, or at least averted the worst of Thursday’s drop. While all 12 sectors in the S&P 500 were down on the day, the energy, utilities and financials sectors outperformed, falling no more than 1.6% each. Shares of Carnival Corporation (CCL) rose 5% and added to gains in pre-market trading, after the company said it would be resuming some cruise operations under its Costa brand this weekend, with the announcement bringing some other peer cruise and travel stocks higher in sympathy.

—

11:34 a.m. ET: Dow extends declines to 500+ points; Nasdaq tumbles 3.7%

The three major indices added to losses intraday Friday, with the Dow extending its losses to more than 500 points, or 1.8%. The Nasdaq slumped 3.6%, or 413 points, while the S&P 500 was down 80 points, or 2.3%. The tech-heavy index was on track to post its worst two-day slide since mid-March, when market volatility peaked during the start of the pandemic in the US.

Shares of Salesforce led declines in the Dow, with the newly inducted component sliding 7% in intraday trading. Apple followed closely thereafter, with shares down 4%.

—

10:15 a.m. ET: All three major indices turn negative as jobs report boost fades

The three major indices each fell Friday morning, reversing some earlier gains. The Nasdaq sharply underperformed and fell more than 2%, as investors continued to take profits from tech stocks that up until this week had handily outperformed…