Wall St ends lower in Omicron’s concern as Reuters reduces the severity of the Fed

Devik Jain and Sinéad Carew

(Reuters) – Wall Street indexes closed lower on Friday as the Nasdaq was driven by declines, as a strong employment report would not slow the removal of Federal Reserve support as they faced uncertainty over the Omicron coronavirus variant.

After opening higher, Wall Street passed the rest of the session and a high volatility index highlighted investor anxiety.

The Department of Labor’s report, before the opening of the session, showed that although growth in agricultural employment rose less than expected in November, the unemployment rate fell to 4.2%, the lowest since February 2020, and wages rose.

In addition, a measure of activity in the U.S. service industry hit a record high in November.

Both data sets have affected investor expectations as the Fed tightens its policy for the next move. Fed Chairman Jerome Powell said this week that the central bank will consider slowing down its bond-buying program more quickly, as interest rate hikes will also be pushed forward, fueling speculation.

“There’s not enough in the employment report to accelerate the Fed’s taper and () it leaves the door open for a faster rate hike than the market could have anticipated,” said Steve Sosnick, chief strategist at Interactive Brokers (NASDAQ :):).

He also expressed concern that the Omicron variant was spreading faster than the Delta, the latest major version of COVID-19.

The number of countries reporting Omicron cases continued to rise on Friday, but there was still little light on the severity of the disease or the level of protection provided by existing COVID-19 vaccines.

They fell by 59.71 points, or 0.17%, to 34,580.08, 38.67 points, or 0.84%, to 4,538.43, and 295.85 points, or 1.92%, to 15,085.47.

The S&P, Dow and Nasdaq recorded a decline for a week, and investors changed dramatically from day to day as investors reacted to Omicron’s news and Powell’s comments.

The S&P was down 1.2% for the second consecutive week, and the Nasdaq was down 2.62% for the second straight week of losses. The Dow fell 0.92% in the fourth consecutive week of the week.

Clearly indicative of investor nerves, Wall Street’s fear gauge, the CBOE Market Volatility Index, rose above 35 in afternoon trading for the first time since the end of January. However, it reduced some gains to 9.7 points from 30.67.

Meanwhile, the highest performance in the S&P sector was for consumer products in the defense sector, which rose by 1.4% and public services, by 1%, followed by healthcare, which rose by 0.25%.

At the end of the session, discretionary consumers fell by 1.8%, with technology falling by 1.65%.

The declines include the heavyweight, Tesla (NASDAQ :), down 6%, and Nvidia (NASDAQ :), down 4%, and Apple Inc (NASDAQ 🙂 and Microsoft (NASDAQ 🙂 lost more than 1%.

“It’s hard to argue that stocks with such high valuations are defensive,” Sosnick of Interactive Brokers said.

And as big-tech technology stocks have been slowing down in broader markets lately, Sosnick said, “That’s the catch in those stocks.”

The economically sensitive Dow fell less than its peers in the session, while other cyclical sectors outperformed the industry, while materials also outperformed.

DocuSign (NASDAQ 🙂 Inc. closed a 42% drop in electronic signature solution companies after declining fourth-quarter revenue.

The decline was more than 2.68 and 1 ratio ahead of the NYSE; On the Nasdaq, the ratios of 3.39 and 1 favored declines.

The S&P 500 released 11 new 52-week highs and six new lows; The Nasdaq Composite recorded 15 new highs and 682 new lows.

US exchanges traded 13.8 billion shares manually compared to an average of $ 11.52 billion in the last 20 sessions.