Stock Market Pares Losses As Nasdaq Falls 1.4%; Jobs Report Offers Mixed Signals

In another day of volatile action, the stock market indexes pared losses by the close as the April jobs report might have been too positive for investor’s taste.

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The Nasdaq composite fell 1.4%, even as the technology sector did not perform as badly as a few others. The S&P 500 reduced its loss to 0.6%. The Dow Jones Industrial Average fell 0.3%.

Volume rose on the Nasdaq and NYSE, early data showed. Declining stocks outnumbered advancers by 7-to-3 on the NYSE and by 5-to-2 on the Nasdaq.

In a bit of a reprieve for the stock market, the S&P 500 barely held above its Monday low of 4062. Technically, that keeps a rally attempt alive for the index, although sellers remain in control.

Small caps fared worse, with the Russell 2000 off 1.7%. It dropped to the lowest level since December 2020.

Jobs Report Mixed For Stock Market

The April job gains were higher than expected. U.S. employers added 428,000 jobs. The unemployment rate held at 3.6% and wage growth eased. Economists had forecast a gain of 400,000 jobs.

But the generally rosy data raised worries that the economy is strong enough to absorb higher interest rates, and that appeared to unsettle the stock market.

Matt Peron, Director of Research at Janus Henderson Investors, said the report was a bit weaker than it appeared on the surface. That may help ease overheated inflation.

“That said, it’s not yet appearing in wage growth, which is still strong,” he said in an analysis. “The shape of the inflation peak and, hopefully, decline are the focus of equity markets, with the market increasingly worried that enough of a decline won’t come without an aggressive Fed and rising risk of recession.”

Coupled with Thursday’s rout, the S&P 500 fell 0.2% for the week and the Nasdaq lost 1.5%. The S&P is now in its longest weekly losing streak since June 2011. The Nasdaq is in the longest losing skid since November 2012, according to Dow Jones Market Data.

Benchmark Yield Still Rising

Stock market losses came as the benchmark Treasury yield’s gains accelerated. The 10-year Treasury note climbed 24 basis points this week to 3.12%, the highest since November 2018. The yield has climbed seven of the past nine weeks. On Friday, the yield rose nearly 6 basis points.

The energy sector stood out among S&P sectors. Energy Select Sector SPDR (XLE) rose 3% to a seven-year high after U.S. crude oil rose 1.4% Friday to $109.77 a barrel.

A couple of apparel companies suffered sizable losses.

Under Armour (UAA) plummeted more than 23% in heavy trading, the stock’s worst day ever recorded, according to Dow Jones Market Data. The company posted an adjusted loss of 1 cent per share. The loss took Wall Street by surprise. Under Armour made its lowest close since September 2020.

Lululemon (LULU) tumbled more than 8%, breaching its 50-day moving average. It was its worst day since March 16, 2020, when it fell 21.4%, according to Dow Jones Market Data.

Illumina (ILMN) plunged 15% to the lowest price since March 2020 even though the provider of genomic analysis services beat earnings expectations and maintained its outlook. It was Illumina’s worst day since March 16, 2020, when it fell 21.4%.

The Innovator IBD 50 ETF fell 1.5% as component Vertex Pharmaceuticals (VRTX) fell below its 50-day moving average a day after its earnings report. But IBD 50 stock Pioneer Natural Resources (PXD) rallied more than 5% to a new high.

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