Stock market today: Wall Street pulls back from its record after a shaky day

By Stan Choe, The Associated Press on March 8, 2024.

NEW YORK (AP) – Wall Street pulled back from its record heights following a shaky day of trading, putting at least a temporary halt to its huge rally since Halloween. The S&P 500 slipped 0.7% Friday from its all-time high. It initially climbed after mixed data on the U.S. job market bolstered hopes for easier interest rates. Later, it swung to a loss after one of its most influential stocks, Nvidia, took a rare stumble following its jaw-dropping rise. The Dow Jones Industrial Average slipped 0.2%, and the Nasdaq fell 1.2%. It was just the third losing week for the S&P 500 in the last 19.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) – Wall Street is wavering around its record heights in a shaky day of trading Friday.

The S&P 500 was down 0.2% from its all-time high set a day before. It initially climbed after a mixed jobs report bolstered hopes that easier interest rates are on the way later this year. But it quickly swung to a loss after one of its most influential stocks, Nvidia, took a rare stumble following its meteoric rise.

The Dow Jones Industrial Average was up 107 points, or 0.3%, as of 2:50 p.m. Eastern time, and the Nasdaq composite was 0.5% lower.

Treasury yields eased in the bond market immediately after the release of a jobs report that economists called “all over the place.” It showed employers hired more workers last month than economists expected, but wages for workers rose by less than forecast. It also said job growth in January was not nearly as hot as earlier thought.

The job market and overall economy are in a delicate spot, where Wall Street wants them to continue growing, but not so much that it raises pressure on inflation.

The ultimate goal is for inflation to cool enough to convince the Federal Reserve to lower its main interest rate from its highest level since 2001. Such a move would release pressure on the financial system and the economy, which has so far remained out of a recession despite high interest rates.

“Big picture: these were helpful numbers for the Fed to gain confidence,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management.

Following the report, bets built on Wall Street that the Fed will likely start cutting in June. The yield on the two-year Treasury, which follows expectations for the Fed, dipped to 4.48% from 4.51% late Thursday.

The yield on the 10-year Treasury, which also focuses on longer-term economic growth, likewise slumped immediately after the report, though it pared its drop later in the morning.

Wall Street loves lower interest rates because they encourage people and companies to borrow, which can strengthen the economy, and because they boost prices for stocks and other investments.

“Things are good, but not great, and they’re getting a touch worse,” Brian Jacobsen, chief economist at Annex Wealth Management, said about the jobs report. “The payroll gains are still fantastic, but we’re not as strong as we thought we were with the prior months’ numbers being revised down.”

Fed Chair Jerome Powell said a day earlier that the central bank is “not far” from cutting interest rates. It just needs additional data confirming that inflation is heading sustainably down to its 2% target.

In the meantime, the hope on Wall Street is that the remarkably resilient economy will drive growth in profits for companies.

Gap climbed 5.5% after the retailer reported stronger profit and revenue for the latest quarter than analysts expected. The retailer said an important sales trend returned to growth at both its Old Navy and Gap stores. The owner of Banana Republic and Athleta also gave a forecast for upcoming sales this year that was a touch higher than analysts’ estimates.

Gun maker Smith & Wesson Brands leaped 28.4% after likewise reporting stronger profit than expected for the latest quarter. It said its shipments grew faster than the overall firearm market.

But Nvidia was the main stock in the spotlight as it fell 4.1%. At one point, it was on track for its worst day in more than a year. It’s a rare blip for the stock that has shot up nearly 80% this year after more than tripling last year.

Because Nvidia has swelled into the third-largest U.S. stock, it carries much more weight on the S&P 500 than nearly every other. That buoyed Wall Street on the way up but leaves it vulnerable to pullbacks, particularly when critics say Nvidia and other stocks caught up in the frenzy around artificial intelligence have shot up too far, too fast.

Also on the losing end was Broadcom, which fell even though it reported stronger results than expected. It dropped 5% after giving a forecast for revenue this upcoming year that was a touch below analysts’ expectations.

Costco Wholesale sank 7.4% after its revenue for the latest quarter fell shy of forecasts.

In stock markets abroad, indexes were mixed in Europe and rose modestly across much of Asia. South Korea was a standout as the Kospi jumped 1.2%.