US stock benchmarks gave up early gains on Friday morning and a technology stock routine resumed as investors dissected the Labor Department's latest monthly jobs update, which surpassed economists' consensus estimates.
Labor market data provided evidence that the economy was slowly recovering from the coronavirus pandemic, but also fueled fears of a rise in inflation in 2021, pushing bond yields further.
How are stock benchmarks performing?
The Dow Jones Industrial Average
traded 31 points, or 0.1%, up to about 30,961.
The S&P 500 index
retreated 9 points to about 3,760, down 0.2%.
The Nasdaq Composite Index
fell 176 points, or 1.4%, and reached about 12,550.
On Thursday, the Dow finished 345.95 points, or 1.1%, lower to a monthly low of 30,924.14, the S&P 500 fell 51.25 points, or 1.3%, to 3,768.47, the Nasdaq Composite Index fell 274.28 points, or 2.1%, it reached 12,723.47, its lowest level in three months and was within 27 basis points of a 10% correction.
What drives the market?
Markets are grappling with good economic news and what that means for bond yields after the US created 379,000 new jobs in February – the largest increase in four months. Economists polled by Dow Jones expected 210,000 jobs to be added, while the unemployment rate fell from 6.3% to 6.2%, although economists generally believe the real figure is much higher.
"It's kind of a tug of war," said Randy Frederick, vice president of trade and derivatives at Schwab Center for Financial Research, via email to MarketWatch.
“Is good news good news, even if it means higher rates? I'm not sure the market hasn't answered this question yet, & # 39; & # 39; he said.
The job data suggests that the distribution of vaccinations and fiscal stimulus measures from Congress are shocking the economy and could push up inflation in the wake of the recession triggered by the public health crisis.
"At a time when the market was already struggling with the surge in bond yields, the significant upside surprise for nonfarm payrolls will not be welcomed by bond investors," said Seema Shah, principal strategist at Principal Global Investors.
Friday morning the return on the 10-year treasury
hovered around 1.57%, after hitting 1.557% on Thursday after investors saw comments from Federal Reserve Chairman Jerome Powell as insufficient detail on how the central bank could act to cool the economy if it overheats. Too hot an economy might force the Fed to raise interest rates faster than they'd like, analysts worry.
"However, this data has heightened inflation fears and is pushing stock futures down," Naeem Aslam, chief market analyst at AvaTrade, wrote in a note on Friday.
At a Wall Street Journal event on Thursday, Powell said the bond market sell-off in recent weeks has his attention and that the central bank would not sit back to broadly tighten financial market conditions.
Meanwhile, the Senate on Thursday pushed Biden's $ 1.9 trillion COVID aid package forward after making a series of adjustments, and is expected to pass its approval sometime over the weekend.
Some of the volatility on Thursday also reflected a & # 39; big rotation & # 39; as some analysts describe a shift from high-flying technology stocks, considered expensive by some measures, to other areas of the market considered undervalued including energy and financial services. yields.
Which stocks are in focus?
said Friday it has entered into an agreement to acquire the 33.925 million shares of Noble Midstream Partners that it does not already own in all share deals. Shares rose 2.4%.
- Hibbett Sports Inc.HIBB said Friday it had net income of $ 23.9 million, or $ 1.39 per share, in the fiscal fourth quarter to Jan. 30, up from $ 6.0 million or 34 cents a share in the same period a year earlier. His shares were down 4.8%.
Shares of Norwegian Cruise Line Holdings LtdNCLH fell 9% on Friday after the cruise operator said it initiated a public offering of 47.58 million shares.
Shares of Big Lots Inc.BIG traded lower on Friday after the discount retailer reported fourth-quarter fiscal profit that exceeded expectations and same-store sales missed amid a weaker-than-expected December but delivered positive first-quarter outlook. Shares were 4.2% lower.
How are other assets doing?
The dollar rose 0.3% as measured by the ICE U.S. Dollar Index DXY, at 92.093.
Oil futures rallied after the Organization of the Petroleum Exporting Countries said it would continue current production cuts through April, US benchmark CL.1 gained $ 1.92 or 3.1% to trade at $ 65.77 a barrel after a gain of more than 4% on Thursday.
Gold Futures GC00 was trading at $ 3.80, or 0.2%, lower at $ 1,696 an ounce.
In Europe, equities traded mixed, with the pan-European Stoxx 600 index SXXP down 0.5% and London's FTSE 100 UKX up 0.3%.
Shares retreated in Asia: the Shanghai Composite SHCOMP ended Friday trading less than 0.1% lower, the Hong Kong Hang Seng Index HSI lost 0.5% and the Chinese CSI 300 000 300 fell 0.3%, while the Japanese Nikkei 225 NIK lost 0.2%.