© Reuters. File photo: On December 28, 2016, street signs on Wall Street can be seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, USA. REUTERS/Andrew Kelly/File Photo
Authors: Devik Jain and Sinéad Carew
(Reuters)-Wall Street’s major stock indexes closed lower on Friday, led by the Nasdaq index, as investors bet that the strong employment report will not slow the Fed’s withdrawal of support, and they are also struggling to cope with the Omicron coronavirus Uncertainty of virus variants.
After opening higher, Wall Street was in a downturn in the following trading day, and the rising volatility index highlighted investor anxiety.
The report released by the Ministry of Labor before the opening of the meeting showed that although non-agricultural employment growth in November was lower than expected, the unemployment rate fell to 4.2%, the lowest level since February 2020, and wages have also increased.
In addition, an indicator measuring US service industry activity hit a record high in November.
Both sets of data seem to have affected investors’ expectations of the Fed’s next tightening of policy. Fed Chairman Jerome Powell said this week that the Fed will consider ending its bond purchase program sooner, which has triggered speculation that interest rates will also be raised in advance.
Steve Sosnick, chief strategist at Interactive Brokers, said: “There is not enough content in the employment report to discourage the Fed from accelerating downsizing, and (it) opens the door for interest rate hikes faster than market expectations.”).
Most importantly, he is concerned that the Omicron variant seems to spread faster than Delta, the last and most popular version of COVID-19.
The number of countries reporting Omicron cases on Friday continues to increase, but the severity of the disease or the level of protection provided by existing COVID-19 vaccines remains unclear.
It fell 59.71 points or 0.17% to 34,580.08, fell 38.67 points or 0.84% to 4,538.43, and fell 295.85 points or 1.92% to 15,085.47.
The Standard & Poor’s, Dow Jones and Nasdaq indexes all fell within a week, and as investors reacted to Omicron news and Powell’s comments, they fluctuated violently every day.
The S&P index fell 1.2% for the second consecutive week of decline, while the Nasdaq index fell 2.62%, which was also the second consecutive week of decline. The Dow fell 0.92% for the fourth consecutive week.
Wall Street’s fear indicator, the Chicago Board Options Exchange Market Volatility Index, exceeded 35 for the first time since the end of January in afternoon trading, which clearly shows the nervousness of investors. However, it gave up some gains and closed at 30.67 points, up 9.7 points.
At the same time, the S&P sector’s outstanding performance was the defensive sector, consumer staples, which closed up 1.4%, and the utilities sector rose 1%, followed by the healthcare sector, which rose 0.25%.
As of the end of the market, consumer discretionary goods fell 1.8%, the largest decline, followed by technology stocks, which fell 1.65%.
The decline included heavyweight stocks such as Tesla (NASDAQ:) and Nvidia (NASDAQ:) that fell 4%, Apple (NASDAQ:) and Microsoft (NASDAQ:) Gram stock code:) fell more than 1%.
“It’s hard to say that a stock with such a high valuation is defensive,” said Sosnick of Interactive Brokers.
Because large-cap technology stocks have avoided the recent deterioration of the market, Sosnick said: “This is catching up with those stocks.”
The Dow, which is sensitive to the economy, fell less than its peers during the session, while other cyclical industries such as industrial and materials also outperformed the broader market.
DocuSign (NASDAQ:) Inc closed down 42% after the electronic signature solutions company forecasted pessimistic revenue in the fourth quarter.
The ratio of the number of falling shares to the number of rising shares on the New York Stock Exchange was 2.68:1; on the Nasdaq, the ratio of 3.39:1 favored the decliners.
The Standard & Poor’s 500 Index hit 11 52-week highs and 6 new lows; the Nasdaq Composite Index hit 15 new highs and 682 new lows.
On the U.S. exchange, 13.8 billion shares changed hands, while the average trading volume over the past 20 trading days was 11.52 billion shares.