Wall Street’s main indexes offered mixed performances in the wake of Friday’s disappointing U.S. jobs growth data, which sent the Dow lower on fears about the pace of economic recovery but boosted the tech-heavy Nasdaq as the argument for near-term tapering was weakened.
A majority of the 11 S&P sectors were down by early afternoon, with energy (.SPNY) and financial (.SPSY) stocks leading declines.
Banking stocks (.SPXBK), which generally perform better when bond yields are higher, dropped 0.4% even as the benchmark 10-year Treasury yield jumped following the report.
“The number’s a big disappointment and it’s clear the Delta variant had a negative impact on the labor economy this summer,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
“You can tell because leisure and hospitality didn’t add any jobs and retail actually lost jobs. Investors will conclude that perhaps this will put the (Federal Reserve) further on hold in terms of the timing of tapering. Markets may be okay with that.”
The S&P 500 and the Nasdaq had scaled all-time highs over the past few weeks on support from robust corporate earnings, but investors have remained generally cautious as they watch economic indicators and the jump in U.S. infections to see how that might influence the Fed and its tapering plans.
The labor market remains the key touchstone for the Fed, with Chair Jerome Powell hinting last week that reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases.
On Friday, the Labor Department’s closely watched report showed nonfarm payrolls increased by 235,000 jobs in August, widely missing economists’ estimate of 750,000. Payrolls had surged 1.05 million in July.
By 1:48 p.m. ET (1748), the Dow Jones Industrial Average (.DJI) fell 35.51 points, or 0.1%, to 35,408.31, the S&P 500 (.SPX) gained 1.64 points, or 0.04%, to 4,538.59 and the Nasdaq Composite (.IXIC) added 29.21 points, or 0.19%, to 15,360.39.
The Nasdaq was boosted by technology heavyweights, including Apple (AAPL.O), Alphabet (GOOGL.O), and Facebook (FB.O), which were between 0.2% and 0.5% higher. Tech stocks tend to perform better in a low interest-rate environment.
Chinese ride-hailing firm Didi Global (DIDI.N) gained 2.5% after a media report that the city of Beijing was considering moves that would give state entities control of the company.
Biotechnology firm Forte Biosciences (FBRX.O) slumped 81.8% to be among the top decliners across U.S. exchanges after its experimental treatment for eczema, a skin disease, failed to meet its main goal.
The S&P 500 posted 42 new 52-week highs and one new low; the Nasdaq Composite recorded 104 new highs and 19 new lows.