Stocks Slump on Jobs Report

Daily Market Comment

April 03, 2020

Stocks Slump on Jobs Report

The major averages finished lower for an eleventh consecutive Friday today as investors balked at holding equities over the weekend on coronavirus concerns. Stocks were also slammed by a March jobs report that saw payrolls lose 701,000, far exceeding estimates for a drop of 150,000. Buyers stayed on the sidelines until the last half-hour of trading when a buy program brought the major averages off the lows of the day. Every sector except Consumer Staples (XLP) finished red with Utilities (XLU), Materials (XLB), Communication Services (XLC) and Financials (XLF) all falling more than -2%. Crude oil prices rallied for a second-straight session after Russia expected to cut production by as much as 6-10 million barrels a day. Steep losses in shares of Dow components United Technologies (UTX), UnitedHealth Group (UNH) and American Express (AXP) led to the DJIA falling 360.91 points (-1.69%) to 21052.53. The S&P 500 slid 38.25 points (-1.51%) to 2488.65, while the NASDAQ lost 114.23 points (-1.53%) and settled at 7373.08.

Breadth was negative with declining issues beating advancing issues 3.7:1 on the NYSE and 2.7:1 on the NASDAQ. Declining volume was 66% on the NYSE and 68% of the NASDAQ. VIX tumbled 4.11 points (-8.07%) and finished at 46.80. Crude oil prices jumped 3.42 (+13.51%) and the May contract closed at $28.76 a barrel. Gold rose 9.50 (+0.58%) to $1647.20 an ounce.

It was another volatile session that ended lower ahead of the weekend. Despite the weakness, VIX finally fell below 50 for the first time since early March. That may be pointing to volatility being somewhat reigned in as the major averages continue to look for a bottom. Next week we start to get economic data that will be reflective of how the coronavirus is killing the economy. That will probably lead to at least a retest of the previous lows. Be patient and keep some cash on hand.

Earnings releases to watch for on Monday include: Corporacion America Airports (CAAP), SeaChange International (SEAC) and Simply Good Foods (SMPL).

By David L. Blake, CMT

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Market Recap - 04/03/2020

Index Close Day Change Day % Change YTD % Change
NASDAQ COMPOSITE 7373.08 -114.2 -1.53% -17.82%
DJ UTILITIES 706.01 -23.35 -3.2% -19.69%
DJ TRANSPORT 7305.31 -140.4 -1.89% -32.98%
DJ INDUSTRIALS 21052.53 -360.9 -1.69% -26.23%
NYSE COMPOSITE 9880.63 -181.7 -1.81% -28.98%
S & P 100 INDEX 1151.57 -16.94 -1.45% -20.15%
RUSSELL 2000 1052.05 -33.76 -3.11% -36.44%
S&P 500 2488.65 -38.25 -1.51% -22.97%
CBOE MKT VOLATILITY 46.8 -4.11 -8.07% 239.62%
AMEX COMPOSITE 1520.31 -37.3 -2.39% -40.43%
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