Dow futures were higher even after a losing week on Wall Street as investors ditched equities amid concerns over the new omicron Covid variant and the Federal Reserve’s move to tighten policy.
Futures contracts tied to the Dow Jones Industrial Average jumped 260 points. S&P 500 futures were 0.51% higher, while Nasdaq 100 futures edged up 0.2%.
Nasdaq stock futures were the underperformer on Sunday following a big drop in bitcoin over the weekend and as investors continued to rethink owning tech stocks with high valuations.
The Dow and S&P 500 fell 0.17% and 0.84%, respectively, on Friday. The Nasdaq Composite slid 1.92%.
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Tesla was the biggest drag on the tech-heavy Nasdaq Friday, with shares of the electric vehicle company sliding more than 6%.
Cathie Wood’s flagship Ark Innovation Fund slid more than 5%, and all of the fund’s holdings are now in a bear market apart from two stocks. Teladoc Health, Zoom Video, Roku, Palantir and Twilio are some of the names that have registered steep losses.
The heavy selling in technology stocks extended to the crypto universe where prices also dropped. Bitcoin traded around $57,000 on Friday morning, but by Saturday had plunged to around $43,000. By Sunday the world’s largest cryptocurrency had clawed back some of its losses, but it still traded below the key $50,000 level.
Slower-than-expected job growth also contributed to Friday’s broad market selling. Nonfarm payrolls increased by 210,000 last month, the Labor Department said Friday, which was below the 573,000 number economists surveyed by Dow Jones were expecting.
“A softer payrolls print pulled the rug beneath risk sentiment,” TD Securities wrote Friday in a note to clients. As investors fled to safety the yield on the 10-year Treasury dipped to 1.335%, the lowest since Sept. 21.
The unemployment rate was a better-than-expected 4.2%, down from 4.6% in October. Economists had forecast a reading of 4.5%, according to Dow Jones.
“The job growth number is disappointing, no doubt, especially considering the survey period fell before we even know the name of the newest Covid-19 variant,” said Jeffrey Buchbinder, equity strategist at LPL Financial. “While Omicron may curb hiring a bit over the next month or two, we remain confident in our expectation for strong job gains and above-average growth in the U.S. economy in 2022,” he added.
Friday’s selling wrapped up a volatile week for the major averages as investors evaluated new information about the omicron variant.
Source: https://www.cnbc.com/2021/12/05/stock-market-futures-open-to-close-news.html