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By Nicholas
Jasinski | Thursday, May 5 About-Face. Stocks gave back
yesterday's gains in short order. The post-Federal Reserve
meeting relief rally didn't last a day. Stocks had soared Wednesday afternoon after
the Fed's policy-setting committee announced a half-point interest rate
increase and a timeline for shrinking its balance sheet. That rally was
confusing at the time, and not everyone was surprised it didn't keep. "We shouldn’t have gone up 2% yesterday
on the news,” said Tom Essaye, founder of Sevens
Report Research. Today's losses more than wiped that away.
The Nasdaq Composite dropped a
full 5%, to its lowest closing value since late November 2020. E-commerce
companies and other tech shares had a particularly bad day (more on that
below). The S&P 500 lost 3.6% and the Dow
Jones Industrial Average fell 3.1%. Only 19 S&P 500
stocks finished the day in the green. That's after gains of at least 2.8% for
all three indexes yesterday. Volatility has taken the wheel, and
investors need to buckle up for more bumps ahead. For all the action, though,
the S&P 500 is now about flat over the past five trading days. Rising bond yields were in focus today,
explaining the heavier losses for the Nasdaq and its more growth-oriented
stocks. The yield on the 10-year U.S. Treasury note rose 0.15 percentage
point today, to just under 3.1%. That's its highest yield since November 2018
and is up 1.44 percentage points since the start of the year. Barron's Alexandra Scaggs
has more
on the latest moves in bond markets. Next up tomorrow morning will be the April
jobs report from the Bureau of Labor Statistics. On
average, economists surveyed by FactSet are expecting to see a gain of
400,000 nonfarm payrolls last month. That would be down from the 431,000 jobs
added in March. The unemployment rate is forecast to remain
at an ultra-low 3.6%. Job openings have lately outnumbered job seekers by
roughly double, and the tightness of the labor market has resulted in rising
wages in numerous industries and sectors. And that has been a big contributor
to inflation. |
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DJIA: -3.12% to 32,997.97 The Hot Stock: EPAM
Systems +10.7% Best Sector: Utilities -1.0% |
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