WALL Street’s two major indexes turned red on Friday (Mar 8) with Nasdaq leading losses as high-flying chip stocks went into reverse and a labor market report showed that while employers added more jobs than expected the unemployment rate unexpectedly rose.
The S&P and Nasdaq briefly hit intraday record highs but started to lose steam late morning.
After rising more than 5 per cent and hitting a record high, artificial intelligence chip darling Nvidia fell more than 5 per cent, leading losses among mega cap growth and technology peers. It had closed higher for the previous 6 sessions.
The Philadelphia Semiconductor Index was last down more than 3 per cent, after rising to hit an intraday record. In that index, Broadcom slid more than 5 per cent after its full-year forecast failed to impress investors and Marvell Technology shed 10 per cent per cent it forecast first-quarter results below market expectations on soft demand.
Data showed US job growth accelerated in February, with nonfarm payrolls increasing by 275,000 jobs against an expected 200,000 rise. Data for January, however, was revised lower to show that 229,000 jobs were created.
The unemployment rate rose to 3.9 per cent in February after holding at 3.7 per cent for three straight months, while wage growth slowed to 0.1 per cent on a monthly basis.
“People may be taking some chips off the table. We’ve had a decent run. Some of the technology names had moved up quite a bit,” said Charlie Ripley, Senior Investment Strategist for Allianz Investment Management.
“When you’ve markets which have run up as much as this has since the start of the year, with returns coming in as strong as they have, these types of pull backs are healthy to see.”
At 02:25 p.m. the Dow Jones Industrial Average rose 75.65 points or 0.2 per cent to 38,867.00, the S&P 500 lost 16.05 points or 0.3 per cent to 5,141.31, and the Nasdaq Composite lost 115.39 points, or 0.7 per cent, to 16,157.99.
The biggest loser among the S&P 500‘s 11 major sectors was technology, down 1 per cent, while the biggest gainer was real estate, up 1.3 per cent.
On Thursday, Federal Reserve Chair Jerome Powell said the central bank was “not far” from gaining the confidence that inflation is falling sufficiently to begin cutting interest rates.
Lindsey Bell, chief strategist at 248 Ventures in Charlotte, NC said the labour report “kind of solidifies what Chair Powell was saying this week, about the confidence he had in the potential to begin the rate cutting cycle this year.”
“So the market should be pleased with this report,” she said.
Investors will focus next week on February data including consumer prices (CPI) and retail sales for more cues on the prospects for potential rate cuts.
Gap climbed 4.5 per cent after the retailer beat Wall Street expectations for fourth-quarter results, buoyed by strong demand on improved product offerings at its Old Navy and namesake brands during the holiday season, and lower markdowns.
Costco Wholesale eased more than 7 per cent as quarterly sales fell short of estimates due to tepid demand for higher-margin goods.
Advancing issues outnumbered decliners by a 1.4-to-1 ratio on the NYSE where there were 657 new highs and 43 new lows.
On the Nasdaq 2,206 stocks rose and 1,988 fell as advancing issues outnumbered decliners by about a 1.11-to-1 ratio. The S&P 500 posted 63 new 52-week highs and no new lows while the Nasdaq recorded 339 new highs and 76 new lows. REUTERS
