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Stock Market News for Sep 7, 2021

U.S. stock markets closed mostly lower on Friday as a weaker-than-expected non-farm payroll addition report dented investors' confidence.

This story originally appeared on Zacks

U.S. stock markets closed mostly lower on Friday as a weaker-than-expected non-farm payroll addition report dented investors’ confidence. However, technology shares lifted the Nasdaq Composite to a fresh record high, with the benchmark index emerging as the top gainer for the week. The Dow and S&P 500 closed the day in red while the Nasdaq Composite ended the day in green. Wall Street remained closed on Monday for celebrating Labor Day.

- Zacks

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.2%, closing at 35,369.09, reversing its gains from Thursday. Notably, 20 components of the 30-stock index ended in red while 10 finished the day in green.

The tech-heavy Nasdaq Composite closed the day at 15,363.52, up 0.2%, a new record high and continuing its winning streak from previous sessions, on the back of strong performance by large-cap technology stocks. The S&P 500 fell 1.52 points, closing the day at 4,535.43, terminating its gains from the previous two sessions. The Utilities Select Sector SPDR (XLU) and the Materials Select Sector SPDR (XLB) fell 0.8% and 0.7%, respectively. Seven out of eleven sectors of the benchmark index closed in the negative zone, two closed in the green and two remained unchanged.

The fear-gauge CBOE Volatility Index (VIX) remained unchanged at 16.41. A total of 8.37 billion shares were traded on Friday, lower than the last 20-session average of 8.99 billion.

Technology Shares Moved Nasdaq Composite to New Record Highs

Although the Dow and the S&P 500 edged lower in Friday’s session, the Nasdaq Composite managed to close at a fresh record high as heavyweight technology shares moved higher. Notably, a weaker-than-expected non-farm payroll report could possibly signal that the U.S. Federal Reserve’s tapering of bond buying might be delayed. Moreover, the Fed Chair Jerome Powell has already assured that interest rate hikes are still far away. Such a situation boosted shares of technology companies which tend to benefit from a low interest rate scenario.

Technology stocks like CrowdStrike Holdings, Inc. CRWD, NVIDIA Corp. NVDA and Advanced Micro Devices, Inc. AMD gained 2%, 2% and 0.7%, respectively. Both NVIDIA and Advanced Micro Devices carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The confidence of market participants took a hit on Friday, with the Dow and S&P 500 closing the session in red after the U.S. Bureau of Labor Statistics reported that total non-farm payroll employment for August came in at 235,000, falling short of the consensus estimate of 726,000. Job additions for July, however, were revised upward to 1,053,000 from 943,000 reported earlier.

The unemployment rate declined 0.2% to 5.2% in August, from 5.4% in July, and in-line with the consensus estimate of 5.2%. The number of unemployed persons fell to 8.4 million. Notable job gains were reported in professional and business services, private education, transportation and warehousing, manufacturing, and other services while employment in retail trade declined in August.

The report further stated that the average hourly earnings increased 0.6% in August, surpassing the consensus estimate of 0.3% and compared with July’s estimate of 0.4%. The average workweek for August was 34.7, in line with July's estimate of 34.7 which was revised downward from 34.8 reported earlier.

The Institute for Supply Management reported that its Services Purchasing Managers’ Index for August came in at 61.7%, beating the consensus estimate of 61.6%, and compared to 64.1% reported in July. This marked the 15th consecutive month of growth with 17 industries reporting growth during the month.

The report further stated that the Supplier Deliveries Index fell to 69.6% in August, from 72% in July while the Prices Index declined to 75.4% in August, from 82.3% in July. The New Orders Index also inched downward in August and was reported at 63.2%, compared to 63.7% in July.

Weekly Roundup

U.S. stock markets closed the week mostly higher with the Nasdaq Composite emerging as the top gainer, rising 1.6% as investors favored technology stocks. The S&P 500 also rose 0.6% while the Dow fell 0.2%. Both the Nasdaq Composite and the S&P 500 hit fresh all-time highs during the week after the U.S. Federal Reserve Chair assured that even though the $120 billion monthly bond buying program might be tapered going forward, interest rate hikes were still far away. However, a weaker-than-expected non-farm payroll addition in August could lead to a possible delay in the Fed’s tapering of bond purchases as the spread of the Delta variant of COVID-19 remains a concern.

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