Wall St ends lower as Nasdaq rout persists

Wall St ends lower as Nasdaq rout persists

It is the US stock market's highest-profile bet on the rise of renewable energy and the decline of fossil fuels, and Tesla's Model 3 sedan has made major inroads among consumers.

Earlier on Friday, the Labor Department's closely watched employment report showed the jobless rate improved to 8.4 per cent from 10.2 per cent in July, better than analysts had anticipated.

The S&P 500 fell 28.10 points, or 0.8%, to 3,426.96.

On Wednesday, the S&P 500 and the Nasdaq closed at record levels, and the Dow came within 1.5% of its February peak. Economists surveyed by FactSet forecast that the US economy created 1.4 million jobs in August, but that would be down from 1.74 million jobs in July.

Bears took a victory lap as high-flying stocks such as Zoom Video Communications, Tesla and Apple Inc dragged the Nasdaq 100 lower, after the index had rallied in 11 of the past 13 sessions.

Despite this week's stumble, the S&P 500 is up more than 5% for the year following a five-month comeback from its lows in the spring. Catalent shares rose almost 3%, Etsy shares added more than 5%, and Teradyne stock increased more than 2%.

Dragged down by tech, Dow Jones Industrial Average plunges more than 800 points

The Dow Jones Industrial Average opened with new losses and was down 628 points at one point. Prior to Thursday, the S&P 500 had risen nine out of the previous 10 days.

Mega-cap companies such as Apple Inc, Microsoft Inc, Amazon.com Inc and Facebook Inc also pared losses though of that group only Apple managed a very tiny gain for the day."You had a significant sell-off on Thursday, some follow-through in the morning and then we stabilized". While the bank index has fallen more than 30% so far this year the airline index was down 42% year-to-date.

Tesla has been working to meet the criteria, with 4 full profitable quarters and enough revenue, but it seems that in the most recent S&P 500 reshuffle, while 3 new companies were included, Tesla was not one of them.

"The tech gains were so far, so quick that it was nearly concerning, so the reversal of that is natural volatility", Roth said.

There is still plenty of money sloshing through financial systems with the Federal Reserve and many other central banks unleashing massive amounts of cash through bond purchases, while keeping interest rates ultra low. Investors have been betting those companies would continue posting huge profits as people spend even more time online with their devices.

The data adds pressure on the White House and Congress to restart stalled negotiations over the next coronavirus relief package to lift the economy out of the worst recession since the Great Depression. But if that so-called "short-gamma" hedging lifted stocks, logically it should also be capable of exacerbating moves the other way.

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