Wall Street ends lower on Omicron worries and Fed angst by Reuters

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© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York, United States, December 28, 2016. REUTERS / Andrew Kelly / File Photo

By Devik Jain and Sinéad Carew

(Reuters) – Major Wall Street indices closed lower on Friday, with the Nasdaq leading the declines, investors betting a strong jobs report would not slow the withdrawal of Federal Reserve support while they were grappling with the uncertainty surrounding the Omicron coronavirus variant.

After opening higher, Wall Street spent the remainder of the session in the doldrums and a high volatility index highlighted investor anxiety.

The Labor Department report, before the session opened, showed that while growth in non-farm employment rose less than expected in November, the unemployment rate fell to 4.2%, its lowest since February 2020, and salaries have increased.

Meanwhile, a measure of service sector activity in the United States hit a record high in November.

Both sets of data appeared to influence investor expectations about the Fed’s next move to tighten policy. Fed Chairman Jerome Powell said this week the central bank would consider a faster cut to its bond buying program, prompting speculation that interest rate hikes would also be advanced. .

“There is not enough in the jobs report to dissuade the Fed from accelerating the cut and (it) leaves the door open for a faster rate hike than the market might have anticipated,” he said. said Steve Sosnick, chief strategist at Interactive Brokers (NASDAQ:).

On top of that, he highlighted concerns that the Omicron variant appeared to be spreading faster than Delta, the latest most prevalent version of COVID-19.

The number of countries reporting Omicron cases continued to rise on Friday, but the severity of the disease or the level of protection provided by existing COVID-19 vaccines was still unclear.

Le fell 59.71 points, or 0.17%, to 34,580.08, le lost 38.67 points, or 0.84%, to 4,538.43 and fell 295.85 points, or 1.92%, to 15,085.47.

The S&P, Dow Jones and Nasdaq all recorded declines for a week in which they fluctuated sharply overnight as investors reacted to Omicron news and Powell’s comments.

The S&P’s 1.2% drop was its second consecutive weekly decline while the Nasdaq fell 2.62%, also its second consecutive week of losses. The Dow Jones fell 0.92% in its fourth consecutive weekly decline.

A clear sign of investor nervousness, the Wall Street fear indicator, the CBOE market volatility index, rose above 35, in afternoon trading, for the first time since late. January. He did, however, cut some gains to close 9.7 points higher at 30.67.

Meanwhile, the S&P sector outperforming was defensive consumer staples, closing up 1.4% and utilities, adding 1%, followed by healthcare, which climbed 0. 25%.

At the end of the session, consumer discretionary, down 1.8%, was the biggest loser, followed by technology, which fell 1.65%.

The declines included heavyweights such as Tesla (NASDAQ :), down 6%, and Nvidia (NASDAQ :), down 4% and Apple Inc (NASDAQ 🙂 and Microsoft (NASDAQ 🙂 losing more than 1% .

“It’s hard to argue that stocks with such huge valuations are defensive,” said Sosnick of Interactive Brokers.

And with large-cap tech stocks having avoided a recent deterioration in the broader markets, Sosnick said, “It’s catching up to these stocks.”

The economically sensitive Dow fell less than its peers during the session, while other cyclical sectors like Industrials and Materials also outperformed.

DocuSign (NASDAQ 🙂 Inc has closed its doors by 42% after the electronic signature solutions company forecast lower fourth quarter revenue.

Falling issues outnumbered advancing ones on the NYSE by a ratio of 2.68 to 1; on the Nasdaq, a ratio of 3.39 to 1 favored the declines.

The S&P 500 posted 11 new 52-week highs and six new lows; the Nasdaq Composite recorded 15 new highs and 682 new lows.

On the US stock exchanges, 13.8 billion shares changed hands against 11.52 billion on average over the last 20 sessions.


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