Closing Stock Market SummaryThe S&P 500 dropped as much as 3.1% on Friday as investors continued to take profits in the mega-cap/growth/momentum stocks, but a resounding buy-the-dip mindset helped limit the market's decline. The benchmark index briefly returned to its flat line before ending the day lower by 0.8%.
The Nasdaq Composite declined 1.3% after being down 5.1%. The Dow Jones Industrial Average declined 0.6% after being down 2.2%. The Russell 2000 declined 0.6% after being down 2.8%.
Apple (AAPL 120.96, +0.08, +0.1%) was an influential factor in helping lift the major indices off those session lows. AAPL recouped losses after finding itself down 8.3% intraday and down 19.6% from its record high earlier this week. The fast, and steep, downturn presumably presented many traders and investors favorable entry points in the stock and other similar names.
In addition, the rebounding price action in these stocks helped lift sentiment and improve the standings of the S&P 500 financials (+0.8%), industrials (+0.2%), and materials (+0.2%) sectors, which were relative outperformers throughout the day following the August employment report.
Their modest gains, however, were not enough to outweigh the noticeable losses in the communication services (-1.9%), consumer discretionary (-1.4%), and information technology (-1.3%) sectors.
Highlighting the key employment figures, nonfarm payrolls increased by 1.371 million ( consensus 1.400 million), and the unemployment rate was 8.4% (Briefing.com consensus 9.8%), versus 10.2% in July.
While the pace of hiring activity slowed down from the prior three months, it remained on the right path. Some optimism about the growth outlook was manifested in the Treasury market where selling in longer-dated maturities fostered some curve-steepening activity, which was an added boost for bank stocks.
The 2-yr yield increased four basis points to 0.16%, while the 10-yr yield rose ten basis points to 0.72%. The U.S. Dollar Index increased 0.1% to 92.79. WTI crude futures fell 4.0%, or $1.64, to $39.70/bbl. The CBOE Volatility Index fell 8.5% to 30.75, as the rebound in equities tamed hedging interest.
Reviewing the August Employment Situation Report, which better than expected and generally supportive of the recovery trade that favors cyclical/value stocks.
- Nonfarm payrolls increased by 1.371 million (consensus 1.400 million). June nonfarm payrolls revised to 4.781 million from 4.791 million.
- Private sector payrolls increased by 1.027 million (consensus 1.335 million). June private sector payrolls revised to 4.729 million from 4.737 million.
- The unemployment rate was 8.4% (consensus 9.8%), versus 10.2% in July.
- Average hourly earnings increased 0.4% (consensus 0.0%) versus a downwardly revised 0.1% (from +0.2%) in July. The average workweek in August was 34.6 hours (Briefing.com consensus 34.5), versus 34.5 hours in July.
As a reminder, the market will be closed on Monday for Labor Day. The Consumer Credit report for July and the NFIB Small Business Optimism Index for August will be released on Tuesday.
- Nasdaq Composite +26.1% YTD
- S&P 500 +6.1% YTD
- Dow Jones Industrial Average -1.4% YTD
- Russell 2000 -8.0% YTD