WASHINGTON (dpa-AFX) - Following the sell-off seen in the previous session, stocks continue to see significant weakness in mid-day trading on Friday. With the drop, the Nasdaq and the S&P 500 are pulling back further off the record closing highs set on Wednesday.
The major averages have climbed well off their worst levels of the day but currently continue to post steep losses. The Dow is down 440.16 points or 1.6 percent at 27,852.57, the Nasdaq is down 289.69 points or 2.5 percent at 11,168.41 and the S&P 500 is down 63.02 points or 1.8 percent at 3,392.04.
Technology stocks have helped to lead the sell-off on Wall Street once again, as traders continue to cash in on the recent strength in the sector.
Shares of Apple (AAPL) have climbed well off their worst levels but remain down by 3.3 percent, pulling back further off the record intraday high set in early trading on Wednesday.
Big-name tech stocks like Netflix (NFLX), Amazon (AMZN), and Facebook (FB) are also seeing further downside after posting steep losses on Thursday.
At its lows of the session, the tech-heavy Nasdaq was down nearly 10 percent from the record intraday high set on Wednesday.
Analysts often predict a 10 percent correction by the markets following a prolonged upward trend, although it typically takes longer than two days.
On the economic front, the Labor Department released a report showing another substantial increase in U.S. employment in the month of August, although the pace of job growth continued to slow from the record spike seen in June.
The Labor Department said non-farm payroll employment surged up by 1.371 million jobs in August after spiking by a downwardly revised 1.734 million jobs in July and soaring by 4.781 million jobs in June.
Economists had expected employment to jump by about 1.400 million jobs compared to the addition of 1.763 million jobs originally reported for the previous month.
The strong job growth in August was partly due to the hiring of 238,000 temporary 2020 Census workers, which contributed to a significant increase in government employment.
'Census hiring could rise further in September but, as in previous Census years, those workers will be let go again over the following months,' said Andrew Hunter, Senior U.S. Economist at Capital Economics. 'Nevertheless, there were also solid increases in employment across most of the private sector.'
The continued job growth contributed to a much bigger than expected drop in the unemployment rate, which fell to 8.4 percent in August from 10.2 percent in July. Economists had expected the unemployment rate to edge down to 9.8 percent.
The unemployment rate continued to decline from the post-World War II record high of 13.5 percent in April but remains well above the 50-year low of 3.5 percent seen late last year.
Sector News
Gold stocks have shown a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 3.5 percent.
The sell-off by gold stocks comes amid a decrease by the price of the precious metal, as gold for December delivery is sliding $10.80 to $1,927 an ounce.
Significant weakness also remains visible among software stocks, as reflected by the 3.1 percent slump by the Dow Jones U.S. Software Index. The index is pulling back further off the record closing high set on Wednesday.
Shares of DocuSign (DOCU) are sharply lower even though the e-signature software company reported better than expected fiscal second quarter results and raised its full-year guidance.
Housing stocks have also come under pressure over the course of the session, with the Philadelphia Housing Sector Index tumbling by 2.7 percent to its lowest intraday level in a month.
Semiconductor, retail, and telecom stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Friday. Japan's Nikkei 225 Index slumped by 1.1 percent, while China's Shanghai Composite Index slid by 0.9 percent.
Meanwhile, the major European markets also moved to the downside on the day. While the German DAX Index tumbled by 1.7 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index both slumped by 0.9 percent.
In the bond market, treasuries are giving back ground after trending higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.2 basis points at 0.694 percent.
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