US Stock Market: Jobs Data Rattles Investors as Money Moves from Growth to Value Stocks

The major U.S. stock indexes put in a mixed performance on Wall Street on Friday with the benchmark S&P 500 Index and the blue chip Dow Jones Industrial Average ending flat to slightly higher on the day while the tech-heavy NASDAQ Composite closed lower.

Traders said the catalyst behind the mixed performance was the U.S. Non-Farm Payrolls report which showed a sharp slowdown in U.S. employment growth. Also contributing to the two-sided trade were investor concerns lawmakers would not be able to agree on another fiscal stimulus bill to bolster the economy from a coronavirus-induced recession.

In the cash market on Friday, the S&P 500 Index settled at 3351.28, up 2.12 or +0.07%. The Dow Jones Industrial Average closed at 27433.48, up 46.50 or +0.19% and the NASDAQ Composite finished at 11018.98, down 97.09 or -1.02%.

Defensive Sectors Rise, Value Stocks Gain

With the benchmark S&P 500 Index now about 1.5% below its record high, defensive sectors including utilities and real estate were among the gainers. Tech-related stocks, which have fueled a Wall Street rally since March, posted the biggest declines and helped push the NASDAQ Composite down more than 1% during the session, Reuters reported.

Additionally, along the same line, value names, which have been unable to close the performance gap with growth stocks in recent years, advanced. The S&P 500 value index rose, while the S&P 500 growth index fell.

Earnings Season Winding Down

With the second-quarter corporate earnings season largely completed, about 82% of S&P 500 companies that have reported so far have beaten dramatically lowered estimates, with earnings on average coming in 22.5% above expectations, the highest on record.

Releases were on the light side on Friday with T-Mobile US Inc. and Uber among the majors reporting.

T-Mobile US Inc. jumped as it added more-than-expected monthly phone subscribers and said it had overtaken rival AT&T Inc. as the second-largest U.S. wireless provider. The stock was the biggest gainer on the S&P communication services index.

Uber fell as demand for its ride-hailing trips only marginally recovered from pandemic rock-bottom in the second-quarter, even as its food-delivery segment saw double the orders.

Trump Bans Chinese Apps

President Trump on Thursday invoked his emergency economic powers to impose broad sanctions against TikTok, a move that steps up pressure on the Chinese-owned app to sell its assets to an American company.

In the order, which takes effect in 45 days, any transaction between TikTok’s parent company, ByteDance, and U.S. citizens will be outlawed for national security reasons.

In a statement, TikTok says it is “shocked” by the executive order, claiming the Trump administration “paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses.”

TikTok added that the order “sets a dangerous precedent for the concept of free expression and open markets.”

Imagine that. A Chinese owned company lecturing on the concept of free expression and open markets.

For a look at all of today’s economic events, check out our economic calendar.