Wall Street Ends Volatile Week Lower as Investor Nerves Rise | Financial market news

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

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

The Dow Jones Industrial Average fell 0.17% to 34,580.08, the S&P 500 lost 0.84% ​​to 4,538.43, and the tech-rich Nasdaq fell 1.92% to 15,085 , 47.

The US Department of Labor 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 highest low since February 2020, and wages 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 that 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 deter the Fed from accelerating the cut and [it] leaves the door open for a faster rate hike than the market might have anticipated, ”said Steve Sosnick, chief strategist at Interactive Brokers.

On top of that, he highlighted concerns that the Omicron variant of the coronavirus appeared to spread faster than the more widespread Delta variant.

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.

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 percent in its fourth consecutive weekly decline.

A clear sign of investor nervousness, the Wall Street fear indicator, the CBOE market volatility index, broke above 35 in the afternoon 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 outperforms were the defensive consumer staples sectors, closing 1.4% higher; and utilities, adding 1%; followed by health care, which rose 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, down 6%, and Nvidia, down 4% and Apple Inc and Microsoft 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.

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