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Stocks head lower on Wall Street a day after tech sell-off

3 weeks 1 day 4 hours ago Friday, September 04 2020 Sep 4, 2020 September 04, 2020 10:11 AM September 04, 2020 in News
Source: Associated Press

Stocks are falling again on Wall Street in early trading Friday, adding to the market’s losses after its biggest sell-off since June.

The S&P 500 was down 1.2% after initially climbing 0.7% shortly after trading opened. Another slide in technology stocks, which led the selling a day earlier, outweighed gains in financial, industrial companies and elsewhere in the market. Declines in communications stocks and companies that rely on consumer spending also weighed on the market. The benchmark index remains on track for its first weekly loss after five weeks of gains.

Stocks fell after the Labor Department said that U.S. hiring slowed to 1.4 million last month, the fewest jobs since the pandemic began, even as the nation’s unemployment rate improved to 8.4% from 10.2%. The U.S. economy has recovered about half the 22 million jobs lost to the pandemic.

The Dow Jones Industrial Average was down 189 points, or 0.6%, to 28,110 as of 10:20 a.m. Eastern time. It lost more than 800 points on Thursday. The technology-heavy Nasdaq was down 3% a day after a 5% skid.

Treasury yields headed higher, a sign that some investors were less pessimistic about the economy. The 10-year Treasury yield rose to 0.67%, up from 0.62% late Thursday.

Stock indexes in Europe were mostly higher. The CAC 40 in France was up 0.4%, Britain’s FTSE 100 climbed 0.6% and Germany’s DAX was down 0.3%. Markets in China closed broadly lower.

Thursday’s sell-off on Wall Street followed a euphoric rise in recent weeks led by big technology stocks. Both the S&P 500 and Nasdaq had hit record highs just the day before.

Investors have been betting technology companies will keep making huge profits as people spend even more time online with their devices during the pandemic, making new market darlings of companies like Zoom Video Communications as many Americans work remotely and students do online learning.

Some of the tech high flyers racked up more losses Friday. Apple slid 3.3%, Amazon dropped 2.8% and Zoom fell 5.3%. Even so, Apple is still up 59% this year, while Amazon is up 77%. Zoom’ is still up 430% for the year.

Despite this week’s stumble, the S&P 500 is up 6.4% for the year following a five-month comeback from its lows in the spring. The market’s turnaround has been driven by low interest rates, massive amounts of spending on bond purchases by the Federal Reserve and other central banks, and encouraging economic trends as businesses have begun to reopen.

Many investors are also betting that a coronavirus vaccine will arrive later this year and clear the way for a recovery for the economy and corporate profits. Hopes also remain that Congress and the White House will come up with another economic relief package.

U.S. markets will be closed Monday for Labor Day.

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