WASHINGTON (dpa-AFX) - Following the downturn seen over the course of Thursday's session, stocks showed a more substantial move to the downside during trading on Friday. The major averages all moved sharply lower, with the Nasdaq and the S&P 500 pulling back well off Thursday's record intraday highs.
The major averages ended the day off their lows of the session but still firmly negative. The Nasdaq plunged 472.32 points or 2.2 percent to 47,231.61, the S&P 500 tumbled 101.38 points or 1.6 percent to 6,238.01 and the Dow slumped 542.40 points or 1.2 percent to 43,588.58.
For the week, the Dow plummeted by 2.9 percent, while the S&P 500 the Nasdaq dove by 2.4 percent and 2.2 percent, respectively.
The sell-off on Wall Street came amid concerns about the economic impact of President Donald Trump's tariffs, as the White House announced new tariff rates on dozens of countries.
The new tariffs range from just 10 percent to as high as 41 percent, and the White House said a 40 percent levy will be imposed on goods that have been transshipped to evade applicable duties.
'Investors have been caught off guard, having previously hoped Trump would kick the new tariff levels down the road pending further negotiations with foreign trade partners,' said Russ Mould, investment director at AJ Bell.
He added, 'Instead, we've got new rates galore and that means investors need to spend time understanding what that means for companies in their portfolio.'
Negative sentiment was also generated in reaction to a closely watched Labor Department report showing much weaker than expected job growth in the month of July.
The Labor Department said non-farm payroll employment rose by 73,000 jobs in July, while economists had expected employment to jump by 110,000 jobs.
The report also showed much larger than normal downward revisions to job growth in May and June, with employment in the two months increasing by a combined 258,000 fewer jobs than previously reported.
With the downward revisions, employment in May edged up by 19,000 jobs, while employment in June crept up by 14,000 jobs.
The Labor Department also said the unemployment rate inched up to 4.2 percent in July from 4.1 percent in June, with the uptick matching expectations.
A steep drop by shares of Amazon (AMZN) also weighed on Wall Street, with the online retail giant tumbling by 8.3 percent after reporting better than expected second quarter results but providing disappointing operating income guidance for the current quarter.
Sector News
Airline stocks turned in some of the market's worst performances on the day, with the NYSE Arca Airline Index plummeting by 4.3 percent.
Substantial weakness was also visible among oil service stocks amid a steep drop by the price of crude, as reflected by the 3.5 percent plunge by the Philadelphia Oil Service Index.
Computer hardware, retail and banking stocks are saw significant weakness, while pharmaceutical and housing stocks bucked the downtrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index declined by 0.7 percent, while Hong Kong's Hang Seng Index slumped by 1.1 percent.
The major European markets also showed significant moves to the downside on the day. While the French CAC 40 Index plummeted by 2.9 percent, the German DAX Index plunged by 2.7 percent and the U.K.'s FTSE 100 Index slid by 0.7 percent.
In the bond markets, treasuries surged in reaction to the weaker than expected jobs data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, plunged 14.0 basis points to a three-month closing low of 4.220 percent.
Looking Ahead
Following a busy week on the U.S. economic front, the calendar is relatively quiet next week, although reports on factory orders and service sector activity may attract some attention.
Traders are also likely to keep an eye on the latest batch of earnings news as well as any further developments on the tariff front.
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