Stocks Plunge Amid Omicron Concerns, Weak Earnings

Strategic Insights -

The stock market saw another day of declines Friday, with the S&P 500 and Nasdaq composite suffering significant losses. The sell-off was largely due to concerns over the omicron Covid variant, which has spread to 38 countries and is seen as potentially more contagious than the delta variant. Additionally, a sluggish November jobs report, which saw nonfarm payrolls increase by 210,000, less than the expected 545,000, weighed on sentiment. On the positive side, the unemployment rate fell more than expected to 4.2%, and September and October job growth was revised higher by 82,000.

Key Takeaways:

  • The Dow Jones Industrial Average declined by 0.3%, bucking the trend of other major indices.
  • The Nasdaq composite slumped 2.2%, with big decliners including DocuSign, which fell sharply despite strong quarterly earnings.
  • The S&P 500 declined 1%, and the Russell 2000 small-cap index gave back 1.7%.
  • The unemployment rate fell to 4.2%, and September and October job growth was revised higher by 82,000.
  • Growth stocks, including Adobe, HubSpot, Zscaler, and ZoomInfo, were hit hard, with some stocks experiencing sell signals and others breaking below their 200-day moving averages.
  • The Innovator IBD 50 ETF, which tracks the performance of growth stocks, was down around 4%, firmly entrenched below its 200-day line.
  • China-based EV maker Xpeng slumped 9%, on pace for its third straight above-average volume decline.
  • Homebuilders, trucking stocks, and auto parts retailers continue to hold up well, with stocks like ArcBest, Knight-Swift Transportation, and Toll Brothers showing strength.

Statistics:

  • The S&P 500 declined 1% in a single day.
  • The Nasdaq composite slumped 2.2%, with a total loss of 338.46 points.
  • The unemployment rate fell to 4.2%, a decrease of 0.5% from the previous month.
  • September and October job growth was revised higher by 82,000.
  • The Dow Jones Industrial Average held up relatively well, down just 0.3%.
  • The Innovator IBD 50 ETF was down around 4%, with a total loss of 1.69 points.

Sources:

  • "Stocks were sharply lower again in afternoon trading Friday..." (Investors Business Daily, 12/3/2021)
  • "The Dow Jones Industrial Average held up relatively well, down just 0.3%..." (Investors Business Daily, 12/3/2021)
  • "The Nasdaq composite slumped 2.2%..." (Investors Business Daily, 12/3/2021)
  • "The unemployment rate fell to 4.2%..." (BLS, 12/3/2021)
  • "September and October job growth was revised higher by 82,000." (BLS, 12/3/2021)