Concerns about widespread impact of coronavirus on Chinese and global economy overshadowed stronger-than-expected U.S. jobs report, dragging benchmarks into negative territory on Friday.
The Dow Jones Industrial Average (DJI) rose 277.79 points or 0.9%, to close at 29,102.51 and the S&P 500 rose 18.07 points or 0.5% to close at of 3,327.71. While, the Nasdaq Composite Index closed at 9,520.51, gaining 51.64 points or 0.5%. The fear-gauge CBOE Volatility Index (VIX) increased 3.4% to close at 15.47. Declining issues outnumbered advancing one for a 2.51-to-1 ratio on the NYSE and a 2.64-to-1 ratio on the Nasdaq favored decliners.
How Did the Benchmarks Perform?
Technology stocks, which outperformed the broader market for four straight days, slipped 0.7% on Friday and weighed heavily on the S&P 500. Shares of manufacturing giants with high exposure to global economy, like Caterpillar Inc. (CAT - Free Report) and The Boeing Company (BA - Free Report) , plunged by 2.8% and 1.4%, respectively, dragging on the Dow lower.
Similarly, The Walt Disney Company (DIS - Free Report) and The Goldman Sachs Group, Inc.’s (GS - Free Report) decline of 1.2% and 1.6% also pulled the Dow in the red. Both Disney and Goldman Sachs carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Overall, the S&P index recorded 34 new 52-week highs and one new low. On the other hand, Nasdaq recorded 71 new highs and 74 new lows.
Coronavirus Death Toll Rises
On Friday, China’s National Health Commission confirmed 31,131 confirmed coronavirus cases and death toll rising over 636. The rising death toll tend to fuel worries on how China’s economy will cope up with the slowdown. The second largest economy in the world had reported economic slowed down to 6.1% last year, from 6.8% in 2018.
Further, Chinese authorities are not allowing companies to restart business as risks of contamination is high. The coronavirus is likely to hit the global motor industry, with many car parts manufacturers remaining closed in China. With Hubei under lockdown, Honda Motor Co., Ltd. (HMC - Free Report) , General Motors Company (GM - Free Report) , and Dongfeng Motor all suffer as they have factories in the region.
U.S. Job Data Skyrockets
According to data released on Friday by the Labor Department, unemployment rate ticked higher to 3.6%, as the labor force participation rate increased 0.2%, matching its highest level since June 2013. Additionally, the U.S. jobs market grew more in January as nonfarm payrolls rose 225,000 beating the consensus estimate of 162,000 and above the upwardly revised December figure of 147,000.
Construction lead the way in job creation, as the weather-sensitive industry added 44,000 positions, above the 2019 average of 12,000. Job additions were strong across the leisure and hospitality and health care, both added 36,000. While, professional and business services added 21,000 and job in the transportation and warehousing increased by 28,000.
Overall, stocks remained in positive territory for the week, thanks to strong economic data that lifted investors sentiment and overshadowed the fears over coronavirus. The Nasdaq Composite Index ended the week 4% higher, while the S&P 500 and the Dow ended the week 3.2% and 3% higher, respectively.
Further, benchmarks hit record highs on Thursday boosted by China’s decision to halve tariffs on $75 billion worth U.S. products. Fueling the S&P 500 to make its biggest weekly percentage gain in eight months and the Nasdaq to make its biggest weekly rise in over a year.
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