MARKET SNAPSHOT: S&P 500 Erases 2016 Gain As Stocks Retreat On Disappointing Jobs Report
May 06 2016 - 12:20PM
Dow Jones News
By Anora Mahmudova and Sara Sjolin, MarketWatch
iShares Nasdaq Biotechnology ETF sinks 2%
U.S. stocks declined for a fourth straight session Friday, after
a disappointing official employment report pointed to a slowdown in
the labor market.
The main indexes were set to book their second consecutive
weekly losses.
Companies scaled back hiring in April, adding just 160,000 new
jobs
(http://www.marketwatch.com/story/us-gains-160000-jobs-in-april-2016-05-06),
while the unemployment rate remained unchanged at 5%. Economists
polled by MarketWatch expected a gain of 203,000. Labor
participation rate fell for the first time in seven months, as more
people dropped out of the labor force.
The weaker-than-expected jobs number sparked speculation that
the Federal Reserve is likely to stay its hand at raising interest
rates over the coming months.
The S&P 500 was down 6 points, or 0.3%, to 2,044. Seven of
the 10 main sectors traded lower. Utilities and health-care stocks
led the losses, while materials and energy sectors benefited from
higher oil prices. The large-cap benchmark has erased its
year-to-date gains.
The Dow Jones Industrial Average was down 16 points, or 0.1%, to
17,644. Meanwhile, the Nasdaq Composite fell 20 points, or 0.4%, to
4,696, with biotechnology shares leading the losses. The iShares
Nasdaq Biotechnology ETF (IBB) was down 2%.
"On the one hand, this jobs reports shows the Fed will not be
able to raise rates until the end of the year, because of what's
going on overseas and upcoming presidential elections in the U.S.
The Fed might just raise rates one more time in December to save
face, like it did last year," said Chris Gaffney, president at
EverBank World Markets.
"Yet, the slowdown in hiring and tepid wage inflation also means
that it's not good for consumers, who ultimately drive companies'
revenues and profits," Gaffney said.
Edward Jones's market strategist Kate Warne said the jobs report
carried an ambiguous message. "It was decent enough to show the
economy still adding jobs, but weak enough to swing expectation of
a rate hike further out. We expect more volatility over the coming
months but still think fundamentals warrant a grind higher," she
said.
Stocks to watch: Shares of GoPro Inc.(GPRO) slumped 5% trade
after the wearable-camera maker said late Thursday it swung to a
deep loss in the first quarter
(http://www.marketwatch.com/story/gopro-swings-to-deep-loss-2016-05-05-16485589).
Herbalife Ltd.(HLF) jumped 13% after the nutritional-products
company's quarterly results beat analysts' expectations
(http://www.marketwatch.com/story/herbalife-jumps-as-first-quarter-results-beat-wall-streets-expectations-2016-05-05).
Yelp Inc.(YELP) rallied 19% after the online-review company late
Thursday raised its revenue forecast
(http://www.marketwatch.com/story/yelp-raises-annual-revenue-guidance-2016-05-05-17485630)
for the year following better-than-expected results.
FireEye Inc.(FEYE) shares tumbled 18% after the security
software company posted a wider loss, cut its sales view for the
year and named a new chief executive officer
(http://www.marketwatch.com/story/david-dewalt-out-as-fireeye-ceo-kevin-mandia-to-take-over-2016-05-05).
Shares of Cigna Corp.(CI) fell 1.8% trade even as the
health-care provider boosted its outlook for the year
(http://www.marketwatch.com/story/cigna-beats-profit-view-raises-outlook-2016-05-06)
and beat Wall Street's earnings expectations.
Apple Inc.(AAPL) and German business software group SAP SE
(SAP.XE) (SAP.XE) said Thursday they will team up on developing
workplace apps
(http://www.wsj.com/articles/apple-sap-to-cooperate-on-workplace-apps-1462474372).
Apple shares were down 0.8%.
Other markets: Oil prices resumed rally on Friday
(http://www.marketwatch.com/story/oil-prices-dip-as-focus-returns-to-global-supply-glut-2016-05-06),
trading above $45 a barrel, after settling firmly higher on
Thursday
(http://www.marketwatch.com/story/oil-prices-rise-as-canadian-wildfire-threatens-output-2016-05-05)
as a wildfire in Canada's oil-sands district and fighting in Libya
threatened production in those countries. Forest fires continued to
rage in Canada on
(http://www.marketwatch.com/story/canada-wildfires-continue-to-rage-in-oil-rich-alberta-2016-05-06)Friday,
shifting further south.
Stocks in Asia closed mostly lower
(http://www.marketwatch.com/story/asian-stocks-head-toward-ninth-straight-week-of-losses-2016-05-05),
as the uncertainty over the U.S. jobs report kept investors from
taking on more risk.
It was the same story in Europe, where markets were mired and
headed toward weekly losses
(http://www.marketwatch.com/story/european-stocks-pull-back-veering-toward-second-straight-losing-week-2016-05-06).
Gold prices
(http://www.marketwatch.com/story/gold-stocks-step-higher-ahead-of-jobs-report-2016-05-06)
rallied sharply, up 1.7% to $1,294.5 an ounce.
(END) Dow Jones Newswires
May 06, 2016 12:05 ET (16:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.