US close: Shares slump as strong jobs report pushes bond yields higher
US stocks slumped on Friday after a stronger-than-expected US jobs report for September pushed government bond yields higher.
By the end of trading, the Dow Jones Industrial Average had fallen 0.68% or 180.43 points to 26,447.05, the S&P 500 was down 0.55% or 16.04 points to 2,885.57, and the Nasdaq Composite by 1.16% or 91.06 points to 7,788.45.
In parallel, the CBoE's VIX volatility index rose 4.22% to 14.82.
Meanwhile, the yield on the benchmark two-year US Treasury note was two basis higher at 2.88% and that on the 30-year bond by six points to 3.40%.
From a sector standpoint, the best performance was to be seen in: Coal (2.25%), Electricity (1.59%) and Utilities (1.51%).
The technology-heavy Nasdaq on the other hand continued to be weighed down by news headlines around the alleged tampering of US technology giants' hardware by Chinese intelligence services continued to be reverberate through markets.
Non-farm payrolls in the States increased by 134,000 last month, according to the Department of Labor, falling well short of economists' forecasts for a rise of 188,000.
But analysts ascribed much of the 'miss' to the impact of hurricane Florence, pointing instead to the large upwards revision of 87,000 for the prior two months combined and to the two tenths of a percentage point drop in the rate of unemployment to 3.7%.
Commenting on Friday's jobs data, Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said: "The unemployment rate continues to trend down, and is on course for about 3-1/4% a year from now, barring a miraculous rise in the participation rate. Don’t bet on that; it's still not moving. No-one at the Fed thinks unemployment near 3% is sustainable, especially if the trend is still falling steadily at the time unemployment hits that level.
"Accordingly, we remain firmly of the view that the Fed will hike again in December and is on course to raise rates next year by at least the 75bp median dot plot forecast."
Separately, the Department of Commerce reported that the US foreign trade deficit widened by 6.4% month-on-month in August to reach -$53.2bn (consensus: -$50.7bn).
In the background meanwhile, the President of the Federal Reserve bank of New York, John Williams, said that the recent rise in market interest rates was not a reflection of worries about inflation, but just the typical reaction to a strong economy.
In corporate news, Snap shares dipped 0.38% following a report of a leaked memo in which chief executive officer Evan Spiegel told employees that Snapchat is doing better now that it has begun to chase its goals at a "sustainable pace".
Elsewhere, Costco Wholesale fell 5.55% after saying late on Thursday that it was assessing its internal control over its financial reporting.
Dow Jones - Risers
Pfizer Inc. (PFE) $44.90 0.47%
McDonald's Corp. (MCD) $166.57 0.46%
Unitedhealth Group Inc. (UNH) $269.20 0.33%
Chevron Corp. (CVX) $125.38 0.30%
Procter & Gamble Co. (PG) $82.15 0.28%
Coca-Cola Co. (KO) $45.88 0.07%
Nike Inc. (NKE) $80.12 -0.07%
Verizon Communications Inc. (VZ) $54.94 -0.15%
Johnson & Johnson (JNJ) $139.10 -0.18%
Merck & Co. Inc. (MRK) $71.03 -0.27%
Dow Jones - Fallers
Intel Corp. (INTC) $47.03 -2.29%
Caterpillar Inc. (CAT) $153.29 -2.19%
Apple Inc. (AAPL) $224.29 -1.62%
International Business Machines Corp. (IBM) $149.03 -1.51%
Dowdupont Inc. (DWDP) $63.19 -1.28%
Home Depot Inc. (HD) $196.35 -1.24%
Walt Disney Co. (DIS) $114.87 -1.16%
Walgreens Boots Alliance, Inc. (WBA) $72.51 -1.13%
Walmart Inc. (WMT) $93.31 -0.96%
Visa Inc. (V) $145.36 -0.95%
S&P 500 - Risers
General Electric Co. (GE) $13.20 4.11%
Tyson Foods Inc. (TSN) $61.55 2.58%
FirstEnergy Corp. (FE) $37.98 2.21%
DTE Energy Co. (DTE) $111.62 2.05%
Clorox Co. (CLX) $149.58 2.05%
PG&E Corp. (PCG) $47.95 2.04%
CMS Energy Corp. (CMS) $49.89 2.00%
Pinnacle West Capital Corp. (PNW) $81.81 1.93%
Entergy Corp. (ETR) $82.76 1.91%
Ameren Corp. (AEE) $65.10 1.88%
S&P 500 - Fallers
Newell Brands Inc (NWL) $18.82 -5.76%
Eastman Chemical Co. (EMN) $91.03 -5.60%
Costco Wholesale Corp. (COST) $218.82 -5.55%
Xilinx Inc. (XLNX) $77.90 -5.28%
Goodyear Tire & Rubber Co. (GT) $22.11 -4.82%
Qorvo, Inc. (QRVO) $72.69 -4.57%
Frontier Communications Co. (FTR) $6.81 -4.49%
Illumina Inc. (ILMN) $329.52 -4.41%
Hewlett Packard Enterprise (HPE) $16.14 -4.10%
HP Inc (HPQ) $25.34 -4.09%
Nasdaq 100 - Risers
Biomarin Pharmaceutical Inc. (BMRN) $101.09 2.37%
Henry Schein Inc. (HSIC) $88.44 1.36%
Verisk Analytics Inc. (VRSK) $119.46 0.93%
Express Scripts Holding Co (ESRX) $96.03 0.81%
Paychex Inc. (PAYX) $72.94 0.76%
Fiserv Inc. (FISV) $81.06 0.73%
Kraft Heinz Co. (KHC) $55.89 0.67%
Cintas Corp. (CTAS) $195.90 0.52%
Automatic Data Processing Inc. (ADP) $150.99 0.51%
NetEase Inc. Ads (NTES) $215.51 0.41%
Nasdaq 100 - Fallers
Tesla Inc (TSLA) $261.95 -7.05%
Costco Wholesale Corp. (COST) $218.82 -5.55%
Dish Network Corp. (DISH) $34.30 -5.33%
Xilinx Inc. (XLNX) $77.90 -5.28%
Illumina Inc. (ILMN) $329.52 -4.41%
Maxim Integrated Products Inc. (MXIM) $53.41 -4.13%
American Airlines Group (AAL) $36.44 -3.90%
Skyworks Solutions Inc. (SWKS) $87.55 -3.84%
Netflix Inc. (NFLX) $351.35 -3.38%
Nvidia Corp. (NVDA) $269.86 -3.38%