Midday Market Update: Tech Continues Rout

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Stocks fell hard Friday, but the selloff can be defined by a move out of the previously high-flying growth tech names, in a market more forgiving of cyclically-driven assets. 

The S&P 500 fell 2%, dragged down by the tech components on the Nasdaq 100, down 5%, before the down-moves moderated closer to 1 pm EDT. The 10-Year Treasury yield rose to 0.69% from 0.63%. Yields rise when prices fall. 

The inflation trade, one that centers on expectations of firming economic demand, took place Friday.

Net jobs added in the U.S. for August was almost 1.4 million against economists' estimates of 1.2 million. This signals the continued V-shaped recovery of the economy and points to at least stabilizing inflation, so long as Congress can deliver sufficient fiscal stimulus this month -- stimulus that played a huge role in the strong consumer spend and jobs growth seen recently. Unemployment is down to 8.4% from above 15% just months ago, an unprecedented pace of recovery, just as the recession itself came about faster than ever. 

“This was an impressive report and once again shows the economy remains quite resilient,” wrote LPL Financial chief market strategist Ryan Detrick in emailed remarks to reporters. “But 8% unemployment is still 8% unemployment, so let’s not get too excited, but we’ll still take this improving trend in the employment picture.”

With the yield curve expanding, a positive for bank profitability, bank stocks rose about 0.8%. Value stocks across sectors fell much less than growth stocks did, with the S&P 500 Vanguard Value ETF  (VOOV) - Get Vanguard S&P 500 Value ETF Report down just 1%. 

As for tech, which has risen sharply as uncertainty over the recovery drove money into secular growth stocks that can power through the economic headwinds, a near-correction is underway, with the Nasdaq 100 down more than 7% from its recent peak hit this week. A 10% down-move from that level is a correction. Thursday, tech stocks began their sell-off, which some noted to TheStreet can last a few days. Stocks that had reached sky-high earnings multiples relative to expected earnings growth like Apple  (AAPL) - Get Apple Inc. (AAPL) Report, Nvidia  (NVDA) - Get NVIDIA Corporation Report and Tesla  (TSLA) - Get Tesla Inc Report tumbled big-time, down as much as 4%, 7% and 7% at the height of the selloff Friday. 

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