Wall St ends decrease on Omicron worries, Fed taper angst By Reuters
© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, the United States, Dec. 28, 2016. REUTERS / Andrew Kelly / File Photo
By Devik Jain and Sinéad Carew
(Reuters) – Wall Street major indices closed lower on Friday, with the Nasdaq leading the declines as investors bet a strong job report wouldn’t slow the Fed’s retreat while dealing with uncertainty deal with the Omicron coronavirus variant.
After Wall Street opened higher, it spent the rest of the session in the doldrums, and an increased volatility index highlighted investor fear.
The Labor Department’s report before the meeting began showing that while non-farm employment growth rose less-than-expected in November, the unemployment rate fell to 4.2%, the lowest since February 2020, and wages rose.
Regardless, a measurement of US service industry activity hit a record high in November.
Both series of data appeared to influence investor expectations about the Fed’s next move to tighten monetary policy. Fed chief Jerome Powell said this week that the central bank would consider accelerating its bond-buying program, sparking speculation about rate hikes.
“The job report doesn’t contain enough to stop the Fed from accelerating the cut and leaves the door open to a faster rate hike than the market would have expected,” said Steve Sosnick, chief strategist at Interactive Brokers (NASDAQ:).
Additionally, he cited concerns that the Omicron variant appears to be spreading faster than Delta, the last most widespread version of COVID-19.
The number of countries reporting Omicron cases continued to rise on Friday, but there was still little clarity about the severity of the disease or the level of protection of the existing COVID-19 vaccines.
The decrease fell by 59.71 points or 0.17% to 34,580.08, the loss by 38.67 points or 0.84% to 4,538.43 and the decrease by 295.85 points or 1.92% to 15,085, 47.
The S&P, Dow and Nasdaq all saw a week of declines, fluctuating wildly from day to day as investors responded to the news of Omicron and Powell’s comments.
The S&P’s 1.2% decline was the second straight weekly decline while the Nasdaq fell 2.62%, also the second straight week of losses. The Dow was down 0.92% on its fourth straight weekly decline.
A clear indication of investor nervousness, Wall Street’s fear meter, the CBOE Market Volatility Index, rose above 35 in afternoon trading for the first time since late January. However, it reduced some gains and closed 9.7 points at 30.67.
Meanwhile, the S&P sectors were the defensive consumer staples, up 1.4% and utilities, up 1%, followed by healthcare, up 0.25%.
At the end of the trading day, consumer discretionary was the biggest loser, down 1.8%, followed by technology, down 1.65%.
The declines included heavyweights like Tesla (NASDAQ 🙂 down 6% and Nvidia (NASDAQ 🙂 down 4%, and both Apple Inc (NASDAQ 🙂 and Microsoft (NASDAQ 🙂 lost more than 1% .
“It’s hard to argue that stocks with such high valuations are defensive,” said Sosnick of Interactive Brokers.
And since large-cap technology stocks avoided a recent deterioration in the broader markets, Sosnick said, “This is catching up with these stocks.”
The cyclical Dow fell less than its peers during the session, while other cyclical sectors such as industrials and materials also outperformed.
DocuSign (NASDAQ 🙂 Inc closed 42% after forecasting declining fourth-quarter sales for electronic signature solutions.
Declining issues outnumbered increasing issues on the NYSE by a ratio of 2.68 to 1; on the Nasdaq favored a ratio of 3.39 to 1 relegated.
The S&P 500 posted 11 new 52-week highs and six new lows; the Nasdaq Composite posted 15 new highs and 682 new lows.
13.8 billion shares changed hands on US stock exchanges, compared with 11.52 billion averaged over the last 20 sessions.