Slowing job growth, stimulus worries weigh on Nasdaq
NEW YORK — The Nasdaq closed lower on Friday, as data showed a sharp slowdown in US employment growth and investors worried lawmakers would fail to agree on another fiscal stimulus bill to bolster the economy from a coronavirus-induced recession.
The S& P 500 and the Dow Jones index ended flat to slightly higher on the day.
With the benchmark S&P 500 index now about 1.5% below its record high, defensive sectors including utilities and real estate were among the gainers. Techrelated stocks, which have fueled a Wall Street rally since March, posted the biggest declines and helped push the Nasdaq down more than 1% during the session.
Along the same line, value names, which have been unable to close the performance gap with growth stocks in recent years, advanced, with financials gaining more than 2%. The S&P 500 value index rose 1.13%, while the S&P 500 growth index fell 0.63%.
The US Labor department’s closely watched report showed nonfarm payrolls increased 1.76 million in July, much lower than the record 4.8 million in June.
However, the figure still topped economists’ expectations and analysts said it could take the pressure off Congress to agree on a relief bill after weeks of wrangling. Differences have partly centered around continuing an extra $ 600- per-week in unemployment benefits.
Congressional Democrats on Friday offered to reduce a proposed coronavirus aid package by $1 trillion if Republicans would add a trillion to their counteroffer, but President Donald Trump’s negotiators rejected the idea on Friday as the latest round of talks ended without a deal.
The Dow Jones Industrial Average rose 46.50 points or 0.17% to 27,433.48; the S&P 500 gained 2.12 points or 0.06% to 3,351.28; and the Nasdaq Composite dropped 97.09 points or 0.87% to 11,010.98.
The declines snapped the Nasdaq’s seven-session streak of gains, with the Dow and S&P falling after rising for five straight days. Each of the three major averages posted weekly gains.
With the second-quarter corporate earnings season largely over, about 82% of S&P 500 companies that have reported so far have beaten dramatically lowered estimates, with earnings on average coming in 22.5% above expectations, the highest on record.
T- Mobile US, Inc. jumped 6.47% as it added more-than-expected monthly phone subscribers and said it had overtaken rival AT&T, Inc. as the secondlargest US wireless provider. The stock was the biggest gainer on the S&P communication services index.
Microsoft Corp., which is seeking to buy TikTok’s US operations, also dropped 1.79%. US- listed Chinese stocks such as Baidu, Inc., Alibaba Group Holding and JD.com, Inc. also declined.
Advancing issues outnumbered declining ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 1.31-to-1 ratio favored advancers.
About 9.78 billion shares changed hands in US exchanges, compared with the 10.4 billion daily average over the last 20 sessions. —