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Market Recap: Friday, October 2

Stocks fell Friday, but pared earlier loses, after President Donald Trump revealed he had tested positive for COVID-19, injecting further uncertainty into an environment roiled by the coronavirus and the upcoming election. In addition, the Labor Department’s September jobs report showed the economy added 661,000 new positions last month, below Wall Street’s expectations and cementing the belief that the recovery is losing steam. The Final Round panel breaks down the details.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round" here on Yahoo Finance. I'm Seana Smith. Just around 45 seconds left in the trading day. And it has been quite a wild ride. The Dow was off 433 points at the lows of the day. This, of course, on the heels of news that President Trump and First Lady Melania Trump testing positive for coronavirus.

But as you can see, with the markets now, the Dow off just over 100 points, we're well off those lows. And a lot of that has to do with stimulus hopes. Hearing from House Speaker Nancy Pelosi, saying that Trump's diagnosis changes the dynamics or stimulus talks. So with that, we have the Dow on track to close up just around 4/10 of a percentage point. S&P off nearly 1%. And the NASDAQ the big loser today, leading the way to the downside today, with the NASDAQ off just around 2--

[BELL RINGING]

[APPLAUSE]

SEANA SMITH: And that does it for the trading day today. Again, all three of the major averages in the red. The NASDAQ off just over 2%, the big laggard today amongst the three major averages. In terms of the Dow, the Dow closing well off the lows of the day but in the red, off just around 140 points. The laggards there in the Dow-- Amgen, Apple, and Microsoft, three of the worst performers.

S&P, well, we're quoting it had fallen below 3,350 as we shake out the final trades of the day. But the S&P following just around 1%. Some of the weakness in the NASDAQ being led by some of the semiconductor names, like Nvidia, Qualcomm among the losers today. And then also in big tech-- Apple, Amazon, Facebook, Google all in the red today.

On the flip side of things when we take a look at the sectors, the cyclical trade is back in favor, at least just for today. Financials, industrials, materials amongst the winners here, as well as some of the defensive names, like utilities. Now, on a typical first Friday of the month we would lead with the jobs report.

That's getting a little bit lost in the news flow today, but certainly is a report that we need to talk about and we need to watch, because when you take a look at the headline number, it was much weaker than expected. 661,000 jobs added to the economy in September. Permanent job losses rising to 3.7 million. And remember that this is the last jobs report before the November elections.

With that, I want to bring in my co-host for the next hour, Myles Udland. And Myles, lots to unpack here today. Certainly, a different picture from what we were looking at at the opening trade. But what's your take on today's action?

MYLES UDLAND: Did anything happen today? Did I miss anything today? No, I mean, seriously, I think, you know, when you look at the jobs report, it is important to keep it in mind, because as you mentioned, it's the last one before the election, though I don't think it was going to materially change how Americans are seeing the economic outlook right now. I know we're going to talk about that with Rick Newman a little bit later on in this hour.

But just some data-- and we were talking about this with Sarah House of Wells Fargo just in the last hour of the program, just kind of the structural changes that we've seen in the labor market with respect to participation, the number of people that are out of the workforce.

And one data point that stood out to me-- George Pearkes over at Bespoke Investment Group had this-- he noted there's about 4.6 million folks on a temporary layoff. If every single one of them got a job, a full-time job tomorrow, we would still have 6 million fewer people employed than we did in September. That is a massive number. That's basically a million job losses per month over the last six months.

And I think while the rate of improvement is still impressive, even though it's slowed a little bit, and the way the labor market has come back has surprised to the upside-- and we shouldn't acknowledge anything other than that, right? It's been a better than feared period for the labor market. The damage is still so significant and so severe that it is a story that, while it might get lost in the shuffle with everything else going on, the state of the labor market right now is something that cannot fall by the wayside.

The Fed has done their part to ensure there is going to be easy monetary policy for years to come. But I think with stimulus talks kind of still floating in the ether, it is essential that lawmakers still realize the scope of the damage that's been done.