Dow Cuts Losses as Apple Rebound Helps Tech Stem Bleed
The Dow moved off lows on Friday, as an Apple-led rebound boosted investor sentiment and eased concerns about the pace of the economic recovery amid a mixed jobs report.
Tech rebounded from lows as Apple (NASDAQ:AAPL) pared losses to trade flat after falling 5% intraday. Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) also cut losses to help the broader market find its footing.
Microsoft was given added boost after the Pentagon reportedly reaffirmed that the tech giant’s proposal for the Jedi cloud contract represents vest value, marking a blow to Amazon’s legal challenge to appeal the original decision.
The Apple-led rebound comes in the wake of mixed jobs that flagged concerns about the pace of the recovery.
Nonfarm payrolls grew by 1.37 million last month, just below expectations of a 1.4 million, the Bureau of Labor Statistics reported Friday. But the unemployment rate fell to 8.4% from 10.2%, a sharper contraction than the 9.8% expected.
While the headline number was under consensus, a deeper dive into the report flagged concerns about the labor market as the gains were led by the hiring of government employees, while the private sector remains sluggish.
Private employers rehired just 1 million workers, and have recovered less than half the jobs lost in March and April.
Stifel Economics, however, suggested the report pointed to improving momentum in the labor market, which could «could alleviate pressure on the White House and Democratic leaders to restart stimulus negotiations, which have reportedly been stalled over the size and scope of the potential package.»
Broadcom reporting better-than-expected quarterly earnings late Thursday, and guidance that topped estimates on expectations for a ramp-up in wireless.
Elsewhere on the earnings front, DocuSign (NASDAQ:DOCU) slumped 10% despite reporting second-quarter earnings more than double consensus.
Smith & Wesson Brands (NASDAQ:SWBI) also reported earnings and revenue that markedly topped analysts’ estimates but saw its shares slip more than 4%.