Disappointing nonfarm payroll data from the government extended markets’ losing streak into the fourth day on Monday, which also was the markets’ longest four-day losing streak since Jan 31. Monday was the first trading day post the release of labor data on Friday, which being a Good Friday was a holiday. Thus, the long weekend gave enough time to investors to ponder over the dismal data, the consequences of which were reflected by the Dow, which settled below 13, 000 for the first time since March 12.
The Dow Jones Industrial Average (DJI) slumped 130.55 points or 1.0% to settle at 12,929.59. The Standard & Poor 500 (S&P 500) signed off yesterday’s trading session at 1,382.20, dropping 1.1%. The tech-laden Nasdaq Composite Index lost 1.1% and was down to 3,047.08. The fear-gauge CBOE Volatility Index (VIX) jumped 12.6% to settle at 18.81. Volumes were once again weak as consolidated volumes on the New York Stock Exchange, the American Stock Exchange and the Nasdaq were 5.52 billion shares, compared with last year's daily average of 7.84 billion. Decliners outnumbered the advancers on the NYSE, as for every four stocks that moved down, only one stock managed to climb higher.
The Dow and S&P 500 have suffered their worst percentage drop since the sixth of last month. The four-day run of losses was also the markets’ longest losing streak since January 31. Additionally, the Dow settled below the 13, 000 mark for the first time since March 12. Meanwhile, the S&P 500 is also trading below its much-cherished 1, 400 level over the past few days. That leaves Nasdaq as the only index hovering above its key level. In fact, it is still 47 points above 3,000. The tech-laden index has been outperforming its fellow benchmarks over the past few weeks. More importantly, Nasdaq was the biggest gainer among the other benchmarks in the previous quarter. However, given the concerns that have crept in since last week, the Nasdaq will also find it difficult to maintain its momentum.
Events of the final day of last week, i.e. Friday, primarily guided the markets yesterday. Markets were closed last Friday and investors had time to ponder over far from impressive nonfarm payroll data on Monday. The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment was up 120,000 in March, contrary to consensus estimates of gains of 209, 000. The report stated that manufacturing, food services and drinking places, and health care recorded an uptrend in employment, whereas retail trade showed declining trends. However, the gains were quite dismal compared to expectations and the economic surprise was a negative 42.6%. Meanwhile, the unemployment rate remained unchanged at 8.2%.
These factors weighed down on investor sentiment, leading to unease about the economy amidst the resurgence of European economic worries. While the benchmarks suffered their fourth-straight decline owing to these concerns, financials and industrials were worst sufferers sector wise. The Financial Select Sector SPDR (XLF) dropped 1.5% and bellwethers including Bank of America Corporation (NYSE:BAC), Citigroup, Inc. (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS) and U.S. Bancorp (NYSE:USB) declined 3.3%, 2.4%, 1.0%, 2.2% and 1.1%, respectively. As for the industrial sector, Industrial Select Sector SPDR (XLI) was down 1.6% and stocks including Deere & Company (NYSE:DE), The Mosaic Company (NYSE:MOS), E. I. du Pont de Nemours and Company (NYSE:DD) and Raytheon Co. (NYSE:RTN) slumped 2.9%, 2.5%, 1.4% and 1.1%, respectively.