Stocks in all sectors were initially down harshly Friday. As investors stewed over the Bureau of Labor Statistics jobs report, risk sentiment crept back, while growth tech stocks kept the major indices down.
The S&P 500 fell 0.4%, dragged down by the large cap tech components of the Nasdaq, which fell 1.5%. The 10-Year Treasury yield rose to 0.70% from 0.67%. Yields rise as prices fall. Investors have been growing slightly more bullish on inflation of late.
The NYSE FANG Index was down about 2.8% by midday, bringing the S&P 500 down with it, but economically-sensitive stocks were up, along with the improving inflation expectations.
Oil stocks rose, with Chevron (CVX) - Get Chevron Corporation Report up 1.3% and smaller more indebted ones like Apache (APA) - Get Apache Corporation Report up almost 5%. Banks rose about 2%, as the yield curve aggressively expanded, a positive for bank profitability. Airline stocks rose just under 2% as House Speaker Nancy Pelosi said a fiscal stimulus bill may pass soon and that airlines should retain employees. The V-shaped economic recovery seems, to many, intact.
Although the jobs report said the U.S. added a net 661,000 jobs in September, under estimates of 800,000, most on Wall Street believe the report had subtle cues indicating the labor market is stronger than it looks on the surface.
"The highly anticipated government jobs report was mixed as even though the headline non-farm payrolls number missed expectations, the unemployment rate fell below 8% and there were further positive surprises under-the-hood,” said Ken Berman, Strategist at Gorilla Trades. "Payroll growth for the past two months was revised notably higher, the number of temporary unemployed fell by over 1.5 million, so although the speed of the recovery is slowing, the impact of the reopening push is apparent.”
Others on Wall Street agree. "While the headline number was weaker than expected,” Marc Pfeffer, chief investment officer at CLS Investments told TheStreet. "I didn’t look at that as a disappointment.”