Weakness in jobs, earnings reports sends stocks reeling
U.S. stocks red; Nasdaq off ~3%, S&P off >2%, Dow off >1.5%
Cons Disc biggest S&P 500 sector loser; Staples sole gainer
Euro STOXX 600 index down >2%
Dollar down >1%; crude off >3%; bitcoin edges up; gold gains
U.S. 10-Year Treasury yield slides to ~3.82%
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WEAKNESS IN JOBS, EARNINGS REPORTS SENDS STOCKS REELING
Wall Street's major indexes are sharply lower on Friday after a much weaker than expected jobs report followed chipmaker Intel's INTC.O a massively disappointing quarterly update and even market heavyweight Amazon.com's AMZN.O reported slowing online sales growth for the second quarter.
Intel said late on Thursday that with Q2 earnings falling well short of Wall Street estimates, it would cut more than 15% of its workforce, affecting some 17,500 people, and suspend its dividend starting in the fourth quarter as it pursues a turnaround of its money-losing manufacturing business. Its shares are down 29%.
While Amazon.com second-quarter profit and cloud computing sales beat analyst estimates it said cautious consumers were seeking out cheaper options for purchases. Amazon shares are down more than 12%. Its online retail business faces stiff competition, but perhaps it is telling that its comments echoed recent sentiments from Oreo-maker Mondelez MDLZ.O, PepsiCo PEP.O and Kraft KHC.O.
As if the weakness from those closely watched companies wasn't already enough to send investors to the exits, the July jobs report also missed economist expectations by a mile.
Lindsey Bell, chief investment strategist at 248 Ventures in Charlotte, NC noted an rise in part-time work and a decline in white collar jobs in tech, finance and professional services.
"This, along with commentary on spending changes from several companies that serve the middle income or aspirational consumer, serves as confirmation that weakness is climbing the ladder and impacting middle to higher income consumers," said Bell.
However, Melissa Brown, managing director for applied research at SimCorp in New York is taking a glass half-full view of the report, which dramatically changes expectations for September interest rate cuts.
"The top line number is a little shocking relative to expectations. It's much lower than expected. But it's a positive number. It's not the lowest we've seen," Brown said.
"The job gains could be low enough to trigger the Fed to act at the next meeting but they're not so low that the signs are flashing recession."
And it would be remiss not to mention that megacap Apple Inc AAPL.O shares are rallying 1.5% after it reported better than expected third-quarter iPhone sales and forecast more gains as it bets on artificial intelligence to attract buyers, even as its overall China business disappointed.
Still among the S&P 500's 11 major industry sectors only one is now gaining and that's staples .SPLRCS. In fact, staples are on track for a record closing high. The biggest decliner is consumer discretionary .SPLRCD, down more than 5%. It's followed by tech .SPLRCT, down more than 2.5%.
And it should be noted that the benchmark U.S. 10-year Treasury yield is lower for the seventh session in a row, hitting its lowest level since December.
Here is your morning snapshot from ~10:18 a.m ET/~1418 GMT:
(Sinéad Carew)
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