The stock market closed out its worst week in more than two months Friday as a second straight day of turbulent trading ended with more losses.
The S&P 500 fell 0.8%, although the index did claw most of the way back from a 3.1% skid earlier in the day. A slide in technology stocks again did much of the damage.
The two-day sell-off came after the S&P 500 set highs earlier in the week and had its best day in nearly two months. There wasn’t a particular catalyst for continued selling in the high-flying tech sector, but analysts noted that those stocks had posted gigantic gains so far this year that many thought were overdone.
“We had a fast and furious rally at the end of August and we’ve given it back,” said Barry Bannister, head of institutional equity strategy at Stifel. “Investors are like a herd of gazelle on the Serengeti; it doesn’t take much to spook them. They’re alarmed and on the move.”
The selling followed a Labor Department report showing that U.S. hiring slowed to 1.4 million last month, the fewest jobs added since the economy started bouncing back from the initial shock of the pandemic, even as the nation’s unemployment rate improved to 8.4% from 10.2%. The U.S. economy has recovered about half the 22 million jobs lost to the pandemic.
The S&P 500 fell 28.10 points to 3,426.96. The Dow Jones Industrial Average lost 159.42 points, or 0.6%, to 28,133.31. The index had swung sharply during the day, between a loss of as large as 628 points and a gain of as big as 247.
The technology-heavy Nasdaq dropped 144.97 points, or 1.3%, to 11,313.13. The slide added to the index’s 5% skid from the day before.
“A lot of people were piling into the (tech) trade and there are a lot of gains to be made,” said Stephanie Roth, portfolio macro analyst at J.P. Morgan Private Bank. “This is more an instance of profit-taking, rather than true panic.”
She noted it’s not unusual for traders to pocket recent gains ahead of a holiday weekend. U.S. markets will be closed Monday for Labor Day.