US stocks fall again with tech shares tumbling

NEW YORK: Wall Street stocks were solidly lower at midday Friday, with tech shares again tumbling, shrugging off data showing the US unemployment rate dropping much more than expected in August.

Near 1620 GMT, the tech-rich Nasdaq Composite Index was down 2.3 percent at 11,195.71, adding to the losses from Thursday's 5.0 percent rout.

The Dow Jones Industrial Average shed 1.4 percent to 27,903.57, while the broad-based S&P 500 dropped 1.6 percent to 3,399.91.

The jobless rate fell to 8.4 percent, the first reading below 10 percent since the coronavirus pandemic struck, while the economy added 1.4 million jobs last month, the Labor Department report showed.

But stocks remained under pressure following a series of records in August, with Amazon, Facebook and other tech giants losing more than three percent.

The relatively better performance of financial shares Friday was evidence of a rotation in the market, Peter Cardillo of Spartan Capital Securities said.

"Today is the Friday before a long weekend," Cardillo said. "People are selling and ignoring the macro news."

After a strong summer that saw US indices enjoy their best August in decades, equities tumbled on Thursday with high-flying tech shares leading the market lower as investors cashed in on the big gains.

Some analysts have described the stock market as divorced from economic fundamentals, with unemployment still at historically high levels even with Friday's better-than-expected data.

"The markets were due for a sell-off -- let's be honest," TD Ameritrade's JJ Kinahan said in a note late Thursday following the rout.