Posted on 08/02/24
| News Source: CNBC
Stocks fell sharply on Friday with the S&P 500 headed for its worst session in almost two years, as a much weaker-than-anticipated jobs report for July ignited worries that the economy could be falling into a recession.
The broad-market index dropped 2.1%, on pace for its biggest drop since December 2022. The Nasdaq Composite lost nearly 2.6%, bringing the decline for the tech-heavy index from its recent all-time high to more than 10%. The Dow Jones Industrial Average fell 785 points, or almost 2%, and at one point was down 989 points.
Stocks sank after July job growth in the U.S. slowed more than expected, while the employment rate rose to the highest since October 2021. Nonfarm payrolls grew by just 114,000 last month, the Labor Department reported, a slowing from 179,000 jobs added in June and below the 185,000 expected by economists polled by Dow Jones. The unemployment rate increased to 4.3%.
The 10-year Treasury yield fell to its lowest since December as investors flooded into bonds for safety on the fear the Federal Reserve made a mistake this week by keeping interest rates at current levels.
Some mega cap names saw steep losses during the day, as Amazon’s second-quarter results sparked investor concerns about Big Tech’s blowout levels of artificial intelligence-related capital spending. The e-commerce giant slid 8.8% after missing the Street’s revenue estimates and issuing a disappointing forecast. Intel, meanwhile, cratered roughly 26% after announcing weak guidance and layoffs. Nvidia lost more than 4%, following a 6% loss a day before.
The Nasdaq is the first of the three major benchmarks to enter correction territory — down more than 10% The S&P 500 and Dow were 6% and 4% below their all-time highs, respectively.