Tech Stocks Leading Another Sell-Off On Wall Street

Stocks have moved sharply lower over the course of morning trading on Friday, extending the sell-off seen in the previous session. The major averages initially moved to the upside but have shown a substantial pullback since then.

Currently, the major averages are all posting steep losses, although the tech-heavy Nasdaq is underperforming its counterparts. While the Nasdaq is down 456.90 points or 4 percent at 11,001.20, the Dow is down 449.39 points or 1.6 percent at 27,843.34 and the S&P 500 is down 79.79 points or 2.3 percent at 3,375.27.

Technology stocks are helping to lead the sell-off on Wall Street once again, as traders continue to cash in on the recent strength in the sector.

Shares of Apple (AAPL) have plunged by 7.2 percent, with the tech giant pulling back further off the record intraday high set in early trading on Wednesday.

Big-name tech stocks like Amazon (AMZN), Netflix (NFLX), and Facebook (FB) are also seeing further downside after posting steep losses on Thursday.

The continued nosedive by stocks also comes after a closely watched report released by the Labor Department showed another substantial increase in U.S. employment in the month of August, although the pace of job growth continued to slow from the record spike seen in June.

The Labor Department said non-farm payroll employment surged up by 1.371 million jobs in August after spiking by a downwardly revised 1.734 million jobs in July and soaring by 4.781 million jobs in June.

Economists had expected employment to jump by about 1.400 million jobs compared to the addition of 1.763 million jobs originally reported for the previous month.

The strong job growth in August was partly due to the hiring of 238,000 temporary 2020 Census workers, which contributed to a significant increase in government employment.

“Census hiring could rise further in September but, as in previous Census years, those workers will be let go again over the following months,” said Andrew Hunter, Senior U.S. Economist at Capital Economics. “Nevertheless, there were also solid increases in employment across most of the private sector.”

The continued job growth contributed to a much bigger than expected drop in the unemployment rate, which fell to 8.4 percent in August from 10.2 percent in July. Economists had expected the unemployment rate to edge down to 9.8 percent.

The notable decrease in the unemployment rate came as the household survey found employment spiked by 3.756 million in August, far outpacing a 968,000 person increase in the size of the labor force.

The unemployment rate continued to decline from the post-World War II record high of 13.5 percent in April but remains well above the 50-year low of 3.5 percent seen late last year.

Software stocks are turning in some of the market’s worst performances in morning trading, dragging the Dow Jones U.S. Software Index down by 4.9 percent. The index is pulling back further off the record closing high set on Wednesday.

Shares of DocuSign (DOCU) are moving sharply lower even though the e-signature software company reported better than expected fiscal second quarter results and raised its full-year guidance.

Retail stocks are also extending the sell-off seen in the previous session, resulting in a 4.4 percent nosedive by the Dow Jones U.S. Retail Index.

Substantial weakness has also emerged among gold stocks, as reflected by the 4.1 percent nosedive by the NYSE Arca Gold Bugs Index. The sell-off by gold stocks comes amid a decrease by the price of the precious metal.

Semiconductor, biotechnology, networking and computer hardware stocks are also seeing considerable weakness, while banking stocks are among the few groups bucking the downtrend.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Friday. Japan’s Nikkei 225 Index slumped by 1.1 percent, while China’s Shanghai Composite Index slid by 0.9 percent.

Meanwhile, the major European markets have also moved to the downside on the day. While the German DAX Index has plunged by 1.9 percent, the French CAC 40 Index is down by 1.1 percent and the U.K.’s FTSE 100 Index is down by 0.8 percent.

In the bond market, treasuries are giving back ground after trending higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5 basis points at 0.672 percent.

Source: Read Full Article