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Stock Market News for Dec 6, 2021

U.S. stocks ended lower on Friday on a weaker than expected and disappointing November jobs report as investors believe that it will not make the Fed change its decision on tapering down support. Also, investors grappled with rising concerns over the Omicron variant of the coronavirus. All the three major indexes ended in negative territory, with Nasdaq suffering the most.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) slipped 0.2% or 59.71 points to finish at 34,580.08 points after hitting an intraday high of 34,801.31 points.

The S&P 500 declined 0.8% or 38.67 points to close at 4,538.43 points after hitting an intraday high of 4,608.03 points. Consumer discretionary, technology and financial stocks were the worst performers.

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The Consumer Discretionary Select Sector SPDR (XLY) declined 1.9%, while the Technology Select Sector SPDR (XLK) fell 1.7%. The Financial Select Sector SPDR (XLF) dropped 1.6%. Eight of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq fell 1.9% or 295.85 points to close at 15,085.47 points. Shares of Apple, Inc. AAPL declined 1.2%, while Tesla, Inc. TSLA plummeted 6.4%. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was up 9.73% to 30.67. A total of 13.8 billion shares were traded on Friday, higher than the last 20-session average of 11.52 billion. Decliners outnumbered advancers on the NYSE by a 2.68-to-1 ratio. On Nasdaq, a 3.39-to-1 ratio favored declining issues.

Weak Job Reports Dent Investors Confidence

U.S. markets ended on a high on Thursday, with the Dow recording its best single-day points gain since Nov 9, 2020. The momentum continued into Friday, with markets opening in the green. However, investors’ confidence took a hit following the weaker-than expected and disappointing November jobs report.

The numbers gave enough reasons to raise concerns of Fed taking an aggressive stance toward tapering its financial support, which is likely to begin soon. Although the headline number looked disappointing, there were quite a few positives that emerged from the report. The report showed that businesses were taking more aggressive stance toward hiring. Moreover, data also slowed more labor-force participation, which the Fed treats as a positive.

However, that didn’t help much, as investors were more concerned over the headline number that took a toll on markets.

Omicron Variant Raises Concern

Just when people were feeling confident, the emergence of the Omicron variant of the coronavirus has again started raising concerns. The new variant which was also detected in a few people in the United States has reignited fears of the virus once, which many believe may slow down economic growth again.

Stocks that are likely to benefit from the economic reopening took a hit on Friday on these growing concerns of the Omicron variant of the virus. Shares of Delta Air Lines, Inc. DAL declined 1.8%, while Las Vegas Sands Corp. LVS declined 3.8%.

Economic Data

The Labor Department report on Friday showed that a meager 210,000 new jobs were added in November far lower than expectations of 573,000 jobs. However, despite the unimpressive headline number, the overall report wasn’t that disappointing.

The report showed that there was more labor-force participation in November and businesses also took more aggressive steps toward hiring. The report showed that around 594,000 heads rejoined the workforce in November, with the rate of participation climbing 61.8%.

Moreover jobless rate declined to 4.2% in November from 4.6% in the previous month.

In other economic data, the U.S. IHS Markit’s purchasing managers index for the services sector came up with a reading of 58 declining slightly from October’s reading of 58.7. The more closely watched data from the Institute for Supply Management came up with a reading of 69.1 in November, higher than expectations of 66.7.

Also, factory orders increased 1% in October.

Weekly Roundup

All the three major indexes recorded losses for the week despite a rebound on Thursday. The Dow ended down 0.9% for the week despite climbing more than 600 points on Thursday. The Dow also recorded its sixth straight week of loses.

The S&P 500 ended the week down 1.2%, while the Nasdaq lost 2.6%. Both the Nasdaq and S&P 500 have now declined for two consecutive weeks.


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