U.S. stocks fell, with the Dow Jones Industrial Average posting its longest slide since 2011, amid declines in commodity producers while data showed continued progress in the labor market.
Energy companies dropped as oil sank to a four-month low, while raw-materials fell the most in two weeks. Hershey Co. slid 2.7 percent after quarterly revenue missed estimates. American Express Co. rallied 6.3 percent as an activist fund was said to have amassed a stake in the company. Nvidia Corp. jumped 12 percent after predicting sales that may exceed some estimates.
The Dow slipped 46.37 points, or 0.3 percent, to 17,373.38 at 4 p.m. in New York, falling for a seventh day to a six-month low. The Standard & Poor’s 500 Index fell 0.3 percent to 2,077.57, above its average price during the past 200 days. The Nasdaq Composite Index sank 0.3 percent, while the Russell 2000 Index lost 0.7 percent, and briefly erased its gain for the year.
“I’m not surprised to see the market down given the downward bias we’ve seen the last couple of days,” said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. “If anything, the report slants the bias towards a September rate hike, given the strength of the jobs numbers.”
Data today showed employers added 215,000 jobs in July and the unemployment rate held at a seven-year low of 5.3 percent. The gain in payrolls followed a 231,000 advance in June that was bigger than previously estimated. While the report also showed a pickup in hours worked, average hourly earnings climbed a less-than-forecast 2.1 percent from a year earlier.
The Federal Reserve is assessing the strength of the U.S. recovery from an early year slowdown as policy makers debate whether the world’s largest economy can withstand the first rate rise since 2006. Traders were pricing in a 54 percent probability of the first increase next month.
“There are probably still a fair number of investors that don’t quite believe the Fed is really going to raise rates,” said Bob Baur, chief global economist at Principal Global Investors in Des Moines, Iowa. The firm oversees $346.2 billion. “This report does nothing to deter the Fed from doing that in September.”
Investors are also watching corporate earnings to gauge the economy’s health. Some 88 percent of S&P 500 members have released results this season, with three-quarters beating profit estimates and half topping sales projections. Analysts now forecast a more modest drop in second-quarter earnings, calling for a 2.1 percent fall instead of a 6.4 percent decline a month earlier.
The S&P 500 dropped 1.3 percent this week amid declines among media and biotechnology shares. Commodity producers have also slumped and Apple Inc. fell into a correction. The benchmark measure is up 0.9 percent this year, trailing most developed-market gauges. The Dow fell 1.8 percent in the week, with Walt Disney Co. leading declines.
While data showed the labor market chugged along at a pace policy makers want to see in order to raise rates, tepid gains in hourly earnings indicate little momentum in wage growth. A rout in commodities from industrial metals to oil continued on signs of a slowdown in China, while selling accelerated in shares of some of the bull market’s biggest winners from biotechnology to media.
The Chicago Board Options Exchange Volatility Index fell 2.8 percent Friday to 13.39, after a 10 percent jump yesterday. The gauge, known as the VIX, was up 10 percent this week, after posting its biggest monthly drop since February. About 6.8 billion shares traded hands on U.S. exchanges, 5 percent above the three-month average.
Seven of the S&P 500’s 10 main groups fell today, with energy, materials and consumer staples sliding the most. Utilities rose for the 10th time in 11 sessions to a more than two-month high.
Energy shares in the benchmark index lost 1.9 percent, with crude oil posting a sixth weekly decline as West Texas Intermediate hit its lowest since March. Consol Energy Inc. tumbled 8 percent to an 11-year low. EOG Resources Inc. and Marathon Oil Corp. dropped more than 5 percent.
CF Industries Holdings Inc. decreased 6.4 percent, the most in more than three years, to lead raw-materials shares lower. CF yesterday agreed to acquire European and North American assets from OCI NV for about $8 billion. The company said the deal will create the world’s largest publicly traded producer of nitrogen fertilizer.
Miner Freeport-McMoRan Inc. slid for the sixth time in seven sessions, down 6.1 percent to its lowest since December 2008. Alcoa Inc. and DuPont Co. retreated more than 1.9 percent.
Hershey weighed on the consumer-staples group amid its biggest decline in seven weeks. Supermarket chain Kroger Co. and Mondelez International Inc. fell at least 1.5 percent. Wal-Mart Stores Inc. slipped 2.1 percent, the most in more than two months.
The Nasdaq Biotechnology Index sank 0.7 percent to a one-month low, after losing 4 percent Thursday. Biogen Inc. and Vertex Pharmaceuticals Inc. slid more than 1.2 percent. The index trimmed an earlier drop of as much as 2.5 percent as Amgen Inc. erased a 1.9 percent slide to rally 1.7 percent, and Endo International Plc added 2.8 percent after falling 2.3 percent.
Twitter Inc. dropped for a third day, down 1.8 percent to an all-time low. The shares are down 26 percent after the social-media company reported financial results last month.
American Express jumped the most in four years after people with knowledge of the matter said ValueAct Capital Management has amassed a stake in the credit-card issuer and is considering pursuing shareholder-friendly changes. The Dow member’s gain helped offset some of the index’s slide to the lowest since February, with AmEx contributing 32 points in a positive direction.