Stocks fell after today's jobs report. The high-beta, momentum stocks saw the worst of it.
First, the scoreboard:
- Dow: 16,412.7 (-159.8, -0.9%)
- S&P 500: 1,865.0 (-23.6, -1.2%)
- Nasdaq: 4,127.7, (-110.0, -2.6%)
And now the top stories:
- The high-beta, expensive momentum stocks got totally slammed today. The biggest losers included Intuitive Surgical, Netflix, Expedia, Priceline.com, Facebook, Google, Yahoo, and Amazon.com. All of these names fell by more than 3.5%. "While high beta/'big momentum' names that trade at higher multiples continue to feel pressure on the downside, value stocks that are lower beta names in sectors like energy, industrial and the utility-space continue to charge higher," noted Rich Barry in the NYSE's MAC Desk Mid-day Update report. "So, to summarize, traders/investors are rotating out of the ‘more exciting, high-flyer’ type names, and are moving the sale proceeds into ‘less exciting’ lower P/E stocks.""
- The dramatic underperformance of the Nasdaq has actually been going on for weeks in what market strategist Ed Yardeni dubbed an "internal correction." In the last month, the Nasdaq fell 5%, with Amazon, Facebook, Netflix and Google booking double-digit losses during the period. Meanwhile, more boring, mature names like Microsoft, Oracle and HP are actually up. This is making for more even valuations in the stock market. "This is NOT a bad thing," said Barry. "In fact, it is very healthy for the overall market."
- The all-important March jobs report was released this morning. U.S. companies added just 192,000 nonfarm payrolls, which was below Wall Street's forecast for 200,000. February's number, however, was revised up to 197,000 from a prior estimate of 175,000. It's worth noting that with today's report, total nonfarm private payrolls stands at 116,067,000, which is an all-time high.
- Average weekly hours worked rose to 34.5 in March from 34.3 in February. Average hourly earnings were unchanged after posting a 0.4% advance in February, missing expectations for an additional 0.2% rise. The year-over-year growth rate ticked down to 2.1% from 2.2%. "Wage growth has taken center stage in recent months as it has advanced to post-crisis highs, raising expectations of a faster-than-expected economic recovery and a tightening labor market that could put the Fed behind the curve with regard to tightening monetary policy, " reported Business Insider's Matthew Boesler. From Renaissance Macro's Neil Dutta: " The flat growth in hourly earnings and the lack of downward movement in the unemployment rate reminds investors that the Fed has plenty of breathing room, for now. "
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