Highlights
Stunning strength in the US jobs report and weak megacap results hit equities Friday. The Dow Jones industrial average fell 0.4 percent, the S&P 500 lost 1.0 percent, and the NASDAQ was off 1.6 percent. US Treasury yields and the dollar jumped while oil prices fell. The US Treasury 2-year yield rose 20 basis points on the day.
Equities sold off at the open as US yields soared after a huge upside surprise in US payrolls followed by separate news of an unexpected surge in US services business activity in January. Buyers materialized at the lows, led by bargain-hunting in Apple, but the major equity indexes fell back after midday as investors reckoned with soaring interest yields on renewed worries that the Federal Reserve will be obliged to raise interest rates much more to tame inflation. Still, the day's losses could have been much worse.
Disappointing results from Apple, Amazon, and Alphabet weighed on the market, alongside downside earnings surprises from Ford, Qualcomm, Starbucks, and Atlassian. Losses were across the board with growth lagging. On the plus side, Apple recovered to end notably higher as analysts saw positives in the iPhone-maker's strong growth in its installed global base of users and in its rising service revenues.
Sectors having especially bad days included utilities, real estate, autos, homebuilders, transports, precious metals, packaging, and chemicals. Energy held up relatively well with oil exploration and oilfield services best. Better earnings news helped steel, biotech, exchanges, and gambling stocks.
Equities sold off at the open as US yields soared after a huge upside surprise in US payrolls followed by separate news of an unexpected surge in US services business activity in January. Buyers materialized at the lows, led by bargain-hunting in Apple, but the major equity indexes fell back after midday as investors reckoned with soaring interest yields on renewed worries that the Federal Reserve will be obliged to raise interest rates much more to tame inflation. Still, the day's losses could have been much worse.
Disappointing results from Apple, Amazon, and Alphabet weighed on the market, alongside downside earnings surprises from Ford, Qualcomm, Starbucks, and Atlassian. Losses were across the board with growth lagging. On the plus side, Apple recovered to end notably higher as analysts saw positives in the iPhone-maker's strong growth in its installed global base of users and in its rising service revenues.
Sectors having especially bad days included utilities, real estate, autos, homebuilders, transports, precious metals, packaging, and chemicals. Energy held up relatively well with oil exploration and oilfield services best. Better earnings news helped steel, biotech, exchanges, and gambling stocks.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
