WASHINGTON (dpa-AFX) - After moving sharply lower early in the session, stocks continue to see significant weakness in afternoon trading on Friday. The major averages are adding to the steep losses posted in the previous session, with the tech-heavy Nasdaq falling to a two-month intraday low.
Currently, the Nasdaq is down 466.78 points or 2.7 percent at 16,727.37, the S&P 500 is down 123.68 points or 2.3 percent at 5,323.00 and the Dow is down 849.38 points or 2.1 percent at 39,498.59.
Concerns about the outlook for the U.S. economy continue to weigh on Wall Street following the release of a closely watched Labor Department report showing employment increased by much less than expected in the month of July.
The report said non-farm payroll employment climbed by 114,000 jobs in July after jumping by a downwardly revised 179,000 jobs in June.
Economists had expected employment to rise by 175,000 jobs compared to the surge of 206,000 jobs originally reported for the previous month.
The Labor Department also said the unemployment rate rose to 4.3 percent in July from 4.1 percent in June. Economists had expected the unemployment rate to remain unchanged.
With the unexpected increase, the unemployment rate reached its highest level since hitting 4.5 percent in October 2021.
While weaker than expected economic data has recently been a positive for the markets amid expectations it would convince the Federal Reserve to lower interest rates, traders now seem concerned the Fed has waited too long and could lead the U.S. into a recession.
'The economy and the stock market have been resilient because unemployment has stayed low and consumers have kept spending, but if that is no longer the case then the Fed has made a serious error in keeping rates too high for too long,' said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.
Negative sentiment has also been generated in reaction to the latest earnings news, with shares of Intel (INTC) plummeting by 27.3 after the semiconductor giant reported weaker than expected second quarter results.
Online retail giant Amazon (AMZN) is also seeing substantial weakness after reporting weaker than expected second quarter revenues and providing disappointing guidance for the current quarter.
On the other hand, shares of Apple (AAPL) have moved to the upside after the tech giant reported fiscal third quarter results that beat analyst estimates on both the top and bottom lines.
Sector News
Semiconductor stocks continued to see significant weakness following the disappointing Intel results, with the Philadelphia Semiconductor Index plunging by 5.5 percent.
Substantial weakness is also visible among oil service stocks, as reflected by the 5.4 percent nosedive by the Philadelphia Oil Service Index.
With Amazon leading the way lower, retail stocks have also moved sharply lower, dragging the Dow Jones U.S. Retail Index down by 4.9 percent.
Financial, computer hardware and networking stocks are also seeing notable weakness amid broad based selling pressure on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Friday. Japan's Nikkei 225 Index plummeted by 5.8 percent, while Hong Kong's Hang Seng Index dove by 2.1 percent.
The major European markets also showed significant moves to the downside on the day. While the German DAX Index plunged by 2.3 percent, the French CAC 40 Index tumbled by 1.6 percent and the U.K.'s FTSE 100 Index slumped by 1.3 percent.
In the bond market, treasuries have moved sharply higher, extending the rally seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 15.4 basis points at 3.823 percent.
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