Correction: Mid-Day Update: Wall Street Limps Into Close At End of a Brutal Week



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A mid-day update published earlier today incorrectly said October nonfarm payrolls were reported today. It should have stated November payrolls. The story has been corrected.

Stocks have reversed their jobs-fueled gains and are trading lower for a third straight day as Wall Street shrugged off a market-friendly jobs report, reassuring trade remarks from NEC director Larry Kudlow as well as a rally in oil when the Dow Jones Industrial Average failed to penetrate resistance at its 200-day moving average and the S&P 500 completed its second “death cross.” Led by losses in tech and health care stocks, the blue chip index is down another 400+ points at midday.

A below consensus increase in November nonfarm payrolls coupled with an anemic 0.2% increase in average hourly earnings lifted the major averages out of the red on the expectation that the Federal Reserve has less ammunition to continue hiking interest rates. Gains were amplified by trade-friendly remarks from Kudlow who assured Wall Street that developments tied to China’s Huawei will not derail US/China trade negotiations.

Oil futures were also supportive when OPEC’s announcement to cut oil production by a greater-than-expected 1.2 mbpd drove Brent crude to a two-week high and lifted the energy sector of the S&P 500 by more than 1%.

Technicals put the brakes on the risk rally, however, as the Dow approached its 200-day moving average and the death cross in the S&P was completed, triggering program trading that amplified losses and sent investors scurrying for safety in gold and short-dated Treasury securities.

Friday morning’s other economic data was lost in the noise of the head-spinning reversal on Wall Street. The preliminary University of Michigan consumer sentiment index was unchanged from November at 97.4 while the future expectations index fell to its lowest level in a year.

Business inventories increased by a better-than-expected 0.8% in October, but sales were down 0.2%, pushing the inventory/sales ratio up to 1.28 from September’s 1.27.

European bourses closed mostly higher but off their best levels in sympathy with Wall Street’s reversal. Germany’s DAX was the exception as disappointing quarterly results from Fresenius Medical Care ( FMS ) and the appointment of a new head of the CDU left the trade-sensitive DAX lower for a fourth straight day.

Crude oil was up $2.12 to $53.61 per barrel. Natural gas was up $0.19 to $4.51 per 1 million BTU. Gold was up $7.40 to $1,251.00 an ounce, while silver was up $0.15 to $14.66 an ounce. Copper was up $0.01 to $2.75 per pound.

Among energy ETFs, the United States Oil Fund was up 3.93% to $11.37 with the United States Natural Gas Fund was up 3.31% to $36.52. Among precious-metal funds, the Market Vectors Gold Miners ETF was up 0.84% to 19.83 while SPDR Gold Shares was up 0.56% to $117.79. The iShares Silver Trust was up 0.94% to $65.04.

Here’s where the markets stand at mid-day:

US MARKETS

NYSE Composite Index was down 112.77 points (-0.95%) to 12,028.64

Dow Jones Industrial Index was down 453.28 points (-1.82%) to 24,494.39

S&P 500 was down 38.17 points (-1.42%) to 2,657.31

Nasdaq Composite Index was down 173.47 points (-2.44%) to 7,012.95

GLOBAL SENTIMENT

FTSE 100 was up 74.06 points (+1.10%) to 6,778.11

DAX was down 22.89 points (-0.21%) to 10,788.09

CAC 40 was up 32.67 points (+0.68%) to 4,813.13

Nikkei 225 was up 177.06 points (+0.82%) to 21,678.68

Hang Seng Index was down 92.62 points (-0.35%) to 26.063.76

Shanghai China Composite Index was up 0.71 points (+0.03%) to 2,605.89

NYSE SECTOR INDICES

NYSE Energy Sector Index was up 114.08 points (+1.11%) to 10,353.15

NYSE Financial Sector Index was down 87.43p points (-1.17%) to 7,373.27

NYSE Healthcare Sector Index was down 292.67 points (-1.83%) to 15,803.72

UPSIDE MOVERS

(+) CRON (+23.92%) Altria ( MO ) making $1.8bln investment for 45% stake

(+) DOMO (+24.12%) Posted narrower Q3 loss vs estimates, beats on revenue, guides Q4, FY19 above street view

(+) AOBC (+13.10%) Reported better-than-expected Q2 EPS and revenue

DOWNSIDE MOVERS:

(-) JP (-32.00%) Reported 30% drop in Q3 revenue

(-) BIG (-22.56%) Reported wider Q3 loss, cut EPS guidance

(-) UNFI (-24.43%) Q1 EPS misses estiamtes

(-) FMS (-9.06%) Expects FY19 profit to stagnate, plans to reset 2020 targets


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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