Closing Stock Market SummaryIt was a rough session for the stock market on the heels of the September Employment Report. A broad sell off was precipitated by a jobs report that reflected continued strength in the labor market, stoking concerns about continued aggressive rate hikes from the Fed.
Despite today's heavy sell off, the stock market was able to hold onto gains from the big rally on Monday and Tuesday. The S&P 500 was up 1.5% for the week; the Dow Jones Industrial Average was up 2.0% for the week; the Nasdaq Composite was up 0.7% for the week.
The market was led lower today by weak mega cap stocks. The Vanguard Mega Cap Growth ETF (MGK) closed down 3.8% versus a 2.8% loss in the S&P 500 and a 2.4% loss in the Invesco S&P 500 Equal Weight ETF (RSP).
Semiconductor stocks were another drag on index performance today. The PHLX Semiconductor Index closed with a 6.1% loss after Advanced Micro Devices (AMD 58.44, -9.41, -13.9%) slashed its revenue and gross margin guidance for Q3, citing a "significantly" weaker PC market.
The weak showing from semiconductor stocks contributed to the underperformance of the S&P 500 information technology sector (-4.1%), which closed in last place for the 11 sectors. The info tech sector was able to squeeze out a gain of 1.6% on the week.
The energy sector (-0.7%) spent most of the session in positive territory and closed with the slimmest loss as oil prices surged. WTI crude oil futures rose 4.5% on the day to $92.47/bbl. The sector also logged the biggest gains on the week, up 13.9%.
Decliner led advancers by a greater than 5-to-1 margin at the NYSE and a nearly 4-to-1 margin at the Nasdaq.
Rising Treasury yields were a headwind for equities today. The 2-yr note yield rose seven basis points on the day, and ten on the week, to 4.30%. The 10-yr note yield rose six basis points on the day, and eight on the week, to 3.88%.
There is no U.S. economic data of note on Monday.
Reviewing today's economic data:
- September Nonfarm payrolls increased by 263,000 (250,000) following an unrevised 315,000 increase in August
- September Nonfarm private payrolls increased by 288,000 ( consensus 275,000) following a revised 308,000 increase in August (from 308,000)
- September Average hourly earnings increased by 0.3% (consensus 0.3%) following a 0.3% increase in August
- September Unemployment rate was 3.5% in September (consensus 3.7%) following a 3.7% rate in August
- September Average workweek totaled 34.5 hours in September (consensus 34.5) following the same number in August
- Today's release of the Employment Situation report for September reflected continued growth in headline employment and monthly average hourly earnings, giving the Fed room to continue its aggressive rate hike campaign.
- August Wholesale Inventories were up 1.3% following a 0.6% increase in July
Dow Jones Industrial Average: -19.4% YTD
S&P Midcap 400: -20.2% YTD
S&P 500: -23.6% YTD
Russell 2000: -24.2% YTD
Nasdaq Composite: -31.9% YTD