The stock market reversed lower Friday morning after opening gains following the November jobs report evaporated. The main indexes are trying to defend key chart levels.
The Nasdaq composite erased a 0.6% gain and traded 1.7% lower around 10:15 a.m. ET. The S&P 500 reversed lower for a loss of 0.7%.
After testing their 50-day moving averages, the Nasdaq and S&P 500 are trying to build on their rebounds from those levels. As such, continued support at the 50-day averages forms an important line of defense for the stock market, which remains under pressure.
In morning trading, the Nasdaq dipped back below its 50-day line, while the S&P 500 held above its moving average.
The Dow Jones Industrial Average fell 0.4%. The Dow is trying to rebound after falling below its 200-day moving average. Chevron (CVX) led the Dow with a 1.5% increase this morning. It is in buy range from a 113.21 buy point in a cup base.
U.S. Stock Market Today Overview
Last Update: 10:14 AM ET 12/3/2021
Small caps, which led Thursday’s rebound with a 2.7% jump in the Russell 2000, fell 1.6% Friday morning. Volume was lower on the NYSE and Nasdaq compared with the same time on Thursday.
Job Gains Smaller Than Expected
U.S. employers added 210,000 jobs in November, the Labor Department reported early Friday. The unemployment rate fell to 4.2% from 4.6% the prior month. Economists polled by Econoday expected, on average, 545,000 nonfarm job additions. The October job growth was revised higher to 546,000.
The slower-than-expected job gains come amid new pandemic worries with the appearance of a new variant. The Omicron variant was identified late in November and could hinder hiring if Americans become reluctant to work in offices, factories and stores.
“This looks weaker than expectations on the surface, but, all told, it’s a pretty solid report,” Fitch Ratings Chief Economist Brian Coulton said in a report. “We had more upward revisions to the back data and the household survey measure of employment leapt by 1.1 million in November. There was a notable bounce in the employment to population ratio — which is keenly monitored by the Fed as a sign of progress toward maximum employment — and the participation rate finally moved up a little.”
Tech, Finance, Consumer Discretionary Lead Stock Market Losses
Technology, financial and consumer discretionary sectors fell 0.7% to 0.9%. Consumer staples, materials and health care were the only S&P sectors higher.
Nucor (NUE) rose 3% after the steelmaker announced late Thursday it raised its quarterly dividend by 23% and set a new $4 billion stock buyback. The new dividend, which applies to shareholders as of Dec. 31 and will be paid Feb. 11, goes to 50 cents a share.
Nucor stock tried to break out of the 119.42 buy point of a cup with handle on Nov. 22 but faded. Shares are now rising from support at the 50-day line.
Marvell Technology (MRVL) gapped to a new high, soaring more than 16%. The chip designer late Thursday beat October-quarter expectations and gave a positive outlook. Marvell’s rally helped chip stocks trade nearly flat as measured by iShares Semiconductor ETF (SOXX). The ETF is finding support at its 21-day exponential moving average.
DocuSign (DOCU) plummeted 37% to the lowest since June 2020 after the company gave a weak outlook. The provider of digital signature and document handling technologies, which soared during the early months of the pandemic, is now 44% below its 10-week moving average. Wedbush and Needham downgraded the stock, while other analysts cut their price targets.
IBD 50 Sharply Lower
Innovator IBD 50 ETF (FFTY) slid nearly 2% and appears to be hitting resistance at the 200-day average. HubSpot (HUBS) and Etsy (ETSY) sold off more than 6% in busy trading and are below the 50-day lines. Adobe (ADBE) sank below its 677.86 buy point.
Chinese stocks were broadly lower, with iShares China Large Cap ETF (FXI) off 3%. Didi Global (DIDI) plans to delist from the NYSE and move its shares to Hong Kong. The Chinese ride-hailing service went public June 30 at 14 a share and has slumped since then. Didi faces a cybersecurity probe in China.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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