Stocks claw back some of their losses in another rocky market day

The stock market closed out its worst week in more than two months Friday as a second straight day of turbulent trading ended with more losses.

The S&P 500 fell 0.8% after clawing most of the way back from a 3.1% skid earlier in the day. Another slide in technology stocks, which led the selling a day earlier, pulled the market sharply lower for much of the day, though the selling eased by late afternoon.

The two-day sell-off handed the benchmark index its first weekly loss after five weeks of gains. Earlier in the week, the S&P 500 was notching all-time highs and posting its biggest increases in nearly two months.

There wasn’t a particular catalyst for continued selling in the tech sector, but analysts noted that those stocks had posted gigantic gains so far this year that many thought were overdone.

“We had a fast and furious rally at the end of August and we’ve given it back,” said Barry Bannister, head of institutional equity strategy at Stifel. “Investors are like a herd of gazelle on the Serengeti; it doesn’t take much to spook them. They’re alarmed and on the move.”

The selling followed a Labor Department report showing that U.S. hiring slowed to 1.4 million last month, the fewest jobs since the pandemic began, even as the nation’s unemployment rate improved to 8.4% from 10.2%. The U.S. economy has recovered about half the 22 million jobs lost to the pandemic.

The S&P 500 fell 28.10 points to 3,426.96. The Dow Jones Industrial Average lost 159.42 points, or 0.6%, to 28,133.31. The index had swung sharply during the day, between a loss of as much as 628 points and a gain of as much as 247.

The technology-heavy Nasdaq dropped 144.97 points, or 1.3%, to 11,313.13. The slide added to the index’s 5% skid from the day before.

The VIX, a gauge of how much volatility investors expect in the market, has been rising. Even so, traders were not shifting funds into traditional safe-haven assets like U.S. government bonds and precious metals, a sign that the sell-off was not necessarily a reaction to jitters about the economy.

“A lot of people were piling into the (tech) trade and there are a lot of gains to be made,” said Stephanie Roth, portfolio macro analyst at J.P. Morgan Private Bank. “This is more an instance of profit-taking, rather than true panic.”

She noted it’s not unusual for traders to pocket recent gains ahead of a holiday weekend. U.S. markets will be closed Monday for Labor Day.