NEW YORK: US stocks lost ground in morning trade on Friday, with technology stocks dragging the main indexes lower, as fears around inflation and the Omicron variant fueled volatile trading.
The S&P 500 technology index tumbled 1.5%, leading losses among the 11 major sectors. Shares in Tesla, Nvidia, Microsoft and Apple fell between 0.7% and 3.5%, dragging down the Nasdaq.
“In the headline S&P 500, if you look below the surface there is a lot of carnage in tech stocks that were somewhat overvalued and that’s what’s contributing mostly to the volatility,” said Jamie Cox, managing partner at Harris Financial Group.
Futures held steady after the Labor Department’s report showed nonfarm payrolls increased by 210,000 jobs in November, far below the 550,000 jobs that economists polled by Reuters had forecast.
The data also showed unemployment rate dropped to 4.2%, the lowest since February 2020, and wages increased further.
“With this jobs report it may give them (Fed) pause to say ok we don’t have to accelerate in December. We can give it another few weeks until we have better data from Omicron and we know what we’re dealing with,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
Fed Chair Jerome Powell said earlier this week that the US central bank will consider at its upcoming meeting a faster wind-down to its bond-buying program, a move widely seen as opening the door to earlier interest rate hikes. Equity markets have fluctuated sharply this week as investors digested updates on the newly detected Omicron variant, which is spreading globally and causing countries to reimpose travel restrictions.
The main three indexes are on course for weekly losses, with Wall Street’s fear gauge, the CBOE Market Volatility index , spiking above 30 for the first in 10 months earlier this week.
At 10:07 a.m. ET, the Dow Jones Industrial Average was down 52.99 points, or 0.15%, at 34,586.80, the S&P 500 was down 21.70 points, or 0.47%, at 4,555.40, and the Nasdaq Composite was down 205.59 points, or 1.34%, at 15,175.73.
The declines came even as data showed a measure of US services industry activity hit a fresh record high in November as businesses boosted hiring, but there was little sign that supply constraints were easing and prices remained high.
Docusign Inc plunged 39.5% after the electronic signature solution firm forecast downbeat fourth-quarter revenue.
Ulta Beauty jumped 1.7% after the beauty retailer raised annual sales and profit forecasts.
Nucor Corp rose 2.8% after the steel products maker increased its quarterly dividend by 23% and announced a $4 billion buyback program.
Declining issues outnumbered advancers for a 1.74-to-1 ratio on the NYSE and a 3.22-to-1 ratio on the Nasdaq.
The S&P index recorded 6 new 52-week highs and 3 new lows, while the Nasdaq recorded 11 new highs and 325 new lows.
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