Stocks angled sharply lower at Friday’s open, as a mixed April payrolls report and another a wave of earnings news defined early trade.
The Dow Jones industrial average shed 0.6%, and the S&P 500 carved a 0.5% loss. Apple (AAPL) held the high ground on the Dow, as nearly all of the 30 Dow stocks traded lower. Intel (INTC) and Caterpillar (CAT) led the declines. Energy construction leader Flour (FLR) dragged on the S&P 500 with an early 20% dive.
The Nasdaq Composite held to a 0.1% decline, buoyed by Apple and big cap biotech Celgene (CELG).
Jobs Growth Below Expectations, Unemployment Rate, Earnings Positive
Hiring in April missed expectations, but that was offset by the unemployment rate falling more than expected and a slightly better-than-expected read on inflation.
Nonfarm employers added 164,000 new workers in April, the Labor Department reported, well below expectations for 191,000 added workers. The report also boosted the department’s March estimate to 132,000 new workers, up from an original estimate of 103,000 new hires.
The unemployment rate fell to a better-than-expected 3.9% — its lowest level since 2000. Average hourly earnings rose 2.6%, below the 2.7% consensus target, a signal that inflation remains within the anticipated range.
On Thursday, the leading indexes largely maintained their stance for the week. The Dow heads into Friday’s open down 1.6% for the week. The S&P 500 is 1.6% lower, while the Nasdaq held to a 0.5% decline. The Dow and S&P 500 are feeling their way along their 200-day moving averages. The Nasdaq has stuck close to its 50-day line, despite rising institutional selling, or distribution, through the past week.
China Markets Slide As Trade Talks End, European Markets Mixed
China’s stock markets were active as the country wrapped up two days of trade talks with a team of U.S. negotiators led by Treasury Secretary Steven Mnuchin. The talks were the first sit-down meeting between the two countries since the Trump administration intensified efforts to reframe the U.S.-China trade relationship. U.S. negotiators presented a list of requirements, including that China trim $200 billion from its U.S. trade imbalance. U.S. officials did not comment on results of the talks. A statement released Friday by China’s official Xinhua News Agency said the discussions were “frank, efficient and constructive.”
Hong Kong’s Hang Seng dropped 1.3% Friday, ending the week down 1.2%. In Japan, Tokyo’s Nikkei 225 shed 0.2%, leaving it with a fractional gain in its sixth-straight weekly advance.
In Europe, Frankfurt’s DAX and London’s FTSE 100 defended their gains after the release of U.S. jobs data. The CAC-40 in Paris posted a narrow decline. All three indexes are tracking toward gains for the week. The DAX leads, up 1.3% from last Friday’s close.
Apple Goes For 5, Pandora Soars; Weight Watchers, Boise Climb
On the Dow, Apple maintained its early lead, up more than 1%. Apple retook both its 50-day line and 200-day line of support this week, after reporting fiscal second-quarter results Tuesday. A number of the stock’s technical indicators are lagging, but it is sitting atop a four-day advance, and below a 179.04 buy point in a double-bottom base.
Weight Watchers (WTW) launched 8% higher in opening trade, after reporting a sharp acceleration in first-quarter revenue and profit growth. Weight Watchers is forming a cup base with a 77.29 buy point.
Boise Cascade (BCC) scrambled up 7% after first-quarter revenue eked past consensus estimates, but earnings were nearly double what analysts expected. Shares are up 10% from an early April low and moving up the right side of a three-month cup base.
IBD 50: Alibaba Slips, Stamps.com Jumps, Abiomed Edges Up, Arista Trips
On the IBD 50 list, Stamps.com (STMP) popped 5% higher. The postage and postal service innovator rang up a 39% gain in earnings per share for its first quarter, far above expectations. Revenue growth of 27% also cleared analyst targets by a wide margin, and the company boosted its full-year earnings guidance to well above consensus forecasts. Shares are extended above a 215.86 buy point.
Alibaba Group Holding (BABA) slipped 1.4%, after fiscal fourth-quarter profit and revenue outpaced analyst projections. Cloud-computing revenue surged 103%, while digital media and entertainment revenue rose 36%. Alibaba’s retail marketplaces saw an increase of 37 million mobile monthly-active-users, to 617 million, during the quarter. The IBD 50 stock has climbed for six straight sessions, building the right side of a possible double-bottom base.
IBD 50 peer Arista Networks (ANET) plunged 11.7% lower, despite outpacing analysts’ first-quarter estimates. But the network gear and software developer’s sales guidance just met consensus views, disappointing investors. The stock is up 91% over the past 12 months, but has been struggling to hold support at its 10-week moving average as it forms a late-stage base.
Cybersecurity IPO Carbon Black is set to launch its initial offering. The issue priced at 19 a share late Thursday, placing its valuation at $1.27 billion.