Dow Jones closes in the red: job market data slows Wall Street out

Wednesday, March 03, 2021

Dow Jones closes in the red
Labor market data slows Wall Street

A sharp rise in bond yields is driving taxes on Wall Street. The technology sector in particular is under pressure and is sensitive to rising returns. In addition, disappointing labor market figures are dampening the mood.

Disappointing US labor market data is dampening sentiment on Wall Street. Of the Dow Jones Index lost 0.4 percent to 31,270 points. Of the S&P 500 decreased by 1.3 percent (3820 points) and for the Nasdaq-Composite was 2.7 percent (12,998 points) downward.

According to the private employment agency ADP, 117,000 jobs were created in the US private sector in February. Experts had expected an increase of 177,000. "The numbers remind us that we are still struggling with the effects of the pandemic," said Mike Loewengart, senior investment strategist at brokerage firm E * Trade. However, there is also the promise of rapid coronavirus mass vaccinations, additional government economic aid and a sustained loose monetary policy by the Fed.

Investors also worried about the renewed rise in bond yields. That of the trend-setting ten-year T-bonds rose to 1.481 percent. A rise to more than 1.5 percent means headwinds for the stock market, said Michael Stritch, chief investor at asset manager BMO. Rising bond yields mean higher financing costs for states and companies. In the tech industry, the rising market interest rates are becoming a problem, as the proportion of debt capital in this sector is particularly high. The shares of Apple, Amazon and Tesla lost between 2.4 and 4.8 percent.

With rising interest rates, banks can look forward to higher profits from the traditional lending business. This and the hope for a powerful recovery of the global economy from the coronavirus consequences gave the industry a boost. The shares of Bank of America, Citigroup and JPMorgan rose around up to 3.5 percent.

In the crude oil market, too, the optimists outnumbered them. So the US variety became more expensive WTI around 1.6 percent to $ 61.55 a barrel (159 liters). According to insiders, Opec + could also decide to extend the current subsidy brake in its deliberations on Thursday because the increase in demand is on shaky feet. However, it is unclear whether this will also apply to the voluntary additional subsidy cuts in Saudi Arabia. In the slipstream of WTI, shares in oil companies like Exxon and Chevron each gained more than two percent.

Also at Bitcoin investors courageously seized it. The oldest and most important cyber motto rose in price by well five percent to $ 50,585. The planned revival of the trading department for cryptocurrencies at the investment bank Goldman Sachs is the most significant news for this market since the announcement of the billion dollar Bitcoin investment by the electric car maker Tesla, said Naeem Aslam, chief market analyst at the brokerage house AvaTrade.

On the other hand, the titles of came under selling pressure Wendy'sthat around a good 5.5 percent slipped. The quarterly results of the fast food chain failed to meet expectations, commented analyst Andrew Charles from the asset manager Cowen. The same applies to the business targets for 2021. Similarly strong price losses also had to be Nordstrom accept (minus 3.5 percentt). Because of the pandemic restrictions, the department store chain's business collapsed by 20 percent in the past quarter. But that is a little less than he feared, wrote analyst David Swartz from the research company Morningstar.