U.S. equities sink with jobs, earnings in focus
Main U.S. indexes red; Nasdaq flirts with correction
Cons Disc biggest S&P 500 sector loser; Cons Staples only gainer
Dollar, gold both down ~1%; bitcoin down >2%; crude off ~4%
U.S. 10-Year Treasury yield slides to ~3.83%
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U.S. EQUITIES SINK WITH JOBS, EARNINGS IN FOCUS
Wall Street indexes are a sea of red on Friday with the big three all down 2% or more after the much weaker than expected July jobs report and some disappointing quarterly results from market heavyweights.
The Nasdaq .IXIC is above its session low, but if it closed at these levels, down 2.6%, it would still be a 10% drop from its closing record high, reached on July 10, a milestone regarded by many on Wall Street as confirmation of a correction.
Investors went from cheering on Wednesday about firmer prospects for a 25 basis point Federal Reserve rate cut in September to now being anxious about a sharp jump in easing expectations. And some started using the dreaded 'r' word.
"The narrative appears to have shifted from soft landing to recession fears, thanks to a bevy of data and quarterly earnings calls this week," wrote Jack Ablin, chief investment officer and founding partner at Cresset Capital.
And meanwhile, the S&P 500 .SPX Q2 earnings growth estimate dipped to 12.9% on Friday from 13.3% on Thursday, according to LSEG data.
As such the CBOE market volatility index .VIX, otherwise known as Wall Street's 'fear gauge' hit 29.66, its highest level since mid-March 2023. It was last close to 26.
Among the S&P 500's 11 major industry sectors consumer discretionary .SPLRCD is leading declines with a more than 5% drop for the day and the sector went negative year-to-date for the first time since early June. It was on track for its biggest one-day percentage decline since September 2022.
Amazon.com AMZN.O, down close to 10% on Friday, is by far its biggest drag.
The benchmark's strongest performers so far are consumer staples .SPLRCS, barely higher, and real estate .SPLRCR, which is down least.
S&P 500 banks .SPXBK, heading for their third straight daily drop in a row, are down 4.9%, eyeing their biggest one-day drop since March 2023, when the sector was under severe stress after several banks collapsed .
Intel INTC.O, down ~28%, created a massive drag on the Philadelphia semiconductors .SOX index, down 4.7%. But selling is broadbased with declines of more than 5% for more than 15 other stocks in the sector. In fact, only two of index's stocks are gaining - Monolithic Power MPWR.O and Advanced Micro Devices <AMD.O>.
The small caps Russell 2000 index .RUT is down 3.5%, returning to levels not seen since July 11, when the index was embarking on a multi-day rally. The RUT's July 31 peak was its highest level since Nov. 2021.
Also, the Dow Transports index .DJT, seen as somewhat of an economic bellwether, is down sharply for the second day in a row, last off 2.8%, which would be its biggest percentage drop since October.
That said one camp of strategists, including Art Hogan at B. Riley Wealth, is questioning the depth of the sell-off.
"This isn’t a category 3 hurricane, but we are seeing how markets react to signs that the economy is normalizing after turning hot in the first half of this year. The path to normalization is never going to be smooth, and we’re just not used to what ‘normalization’ feels like. Markets can find themselves over-reacting and investors glom on to anything as an excuse to take profits,” Hogan told Reuters.
Here is your mid-day snapshot from 1:16 p.m ET/ 1716 GMT:
(Sinéad Carew, Suzanne McGee)
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FOR FRIDAY'S EARLIER LIVE MARKETS POSTS:
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INDIVIDUAL INVESTOR BEARS THIN OUT, BULLS FATTEN UP - AAII - CLICK HERE
WEAKNESS IN JOBS, EARNINGS REPORTS SENDS STOCKS REELING - CLICK HERE
U.S. STOCK FUTURES, YIELDS, PLUNGE AFTER WEAK PAYROLL DATA - CLICK HERE
WHAT DROVE THE NIKKEI'S 5.8% FRIDAY DROP? - CLICK HERE
ETHER ETFs FAIL TO MATCH INITIAL BITCOIN EUPHORIA - CLICK HERE
EUROPEAN LUXURY AND THE YEN - CLICK HERE
FED EASING BETS RAMP UP AFTER WEAK DATA - CLICK HERE
U.S. RECESSION FEARS AND THE SAHM RULE - CLICK HERE
ALL FALL DOWN - CLICK HERE
A RED DAY - CLICK HERE
MORNING BID: NEW WORRIES OVER GROWTH SPOOK MARKETS - CLICK HERE
Wall Street indexes lower https://tmsnrt.rs/4djpYro
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