Tech Stock Weakness Overshadow Wall Street Trading Ahead of Nonfarm Payroll Data

Barry Adams
05 Sep, 2024
New York City

Tech stocks continued to decline for the third day in a row as investors worried about the economic slowdown amid mixed signals. 

The S&P 500 index and the Nasdaq Composite declined in early trading as investors sold high-flying tech and chip stocks amid growing worries of an economic slowdown and weakening labor market. 

Private sector employment expanded below market estimates, according to the latest data released by ADP. 

Private corporations added 99,000 new jobs in August, lower than 111,000 in the previous month, following two years of above-normal growth. 

"Moreover, job gains were flat at 4.8% for existing employees and increased to 7.3% for those who switched jobs, the data showed. 

"The job market's downward drift brought us to slower-than-normal hiring after two years of outsized growth.," ADP chief economist Nela Richardson said in a statement. 

Initial weekly jobless claims declined last week, the Labor Department reported Thursday. 

Weekly jobless claims dropped by 5,000 from the previous week to 227,000 in the week ending on August 31. 

The initial claims fell to a new 7-week low, easing fears of a potential increase in jobless claims amid moderating labor market conditions. 

Continuing claims, which lag by one week, dropped by 22,000 to 1.838 million in the previous week. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.1% to 5,523.07, the Nasdaq Composite fell 0.4% to 17,067.71, and the Russell 2000 index fell 3.1% to 2,144.59. 

The yield on 2-year Treasury notes edged lower to 3.73%, 10-year Treasury notes decreased to 3.74%, and 30-year Treasury bonds inched lower to 4.04%.

WTI crude oil increased $0.51 to $69.75 a barrel, and natural gas prices edged up 4 cents to $2.18 a thermal unit.

Gold rose by $25.41 to $2,520.58 an ounce, and silver increased by $0.55 to $28.81.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.15.

 

U.S. Stock Movers

Topgolf Callaway Brands increased 1.1% to $10.90 after the company said it plans to separate into two companies. The company will separate its golf equipment and lifestyle business from its entertainment business. 

C3.ai declined 11.5% to $20.42, and the company reported sharply lower-than-expected subscription revenue in its latest quarter. 

Total revenue in the fiscal first quarter increased 21% to $87.2 million from $72.4 million, and subscription revenue advanced 20% to $73.5 million from $61.4 million a year ago. 

The weaker-than-expected growth in its subscription revenue negatively impacted the stock. 

Net loss in the quarter shrank to $62.8 million from $64.3 million, and diluted loss per share fell to 50 cents from 56 cents a year earlier. 

AeroVironment declined by 3.5% to $186.60 despite the defense contractor reporting better-than-expected revenue and earnings in the fiscal first quarter. 

Revenue in the first quarter ending in July increased by 24% to $189.5 million from $152.3 million, net income edged slightly lower to $21.2 million from $21.8 million, and diluted earnings per share fell to 75 cents from 84 cents a year ago.