The Dow Jones Industrial Average extended losses Friday despite some good news in the latest employment report. Meanwhile, Wall Street watched another violent sell-off in SVB Financial (SIVB), a technology lender based in California’s Silicon Valley, before shares were halted.
SVB Financial was halted in premarket trading when the stock was down another 63% to 39.49. Reports surfaced that the bank hasn’t been able to raise capital and that it’s in talks to sell itself. Shares plunged 60% Thursday after SIVB announced a $2.25 billion stock sale to help cover big losses in the Treasury market. Bloomberg reported that venture capitalists, including Peter Thiel’s Founders Fund, are advising startups to withdraw their money from SIVB.
The 10-year Treasury yield plunged 21 basis points to 3.71% as it tests a major support level.
Early gainers in the S&P 500 included Newmont Mining (NEM), along with health care stocks like Eli Lilly (LLY), Vertex Pharmaceuticals (VRTX) and Merck (MRK). Inside the Nasdaq 100, Atlassian (TEAM), Marvell Technology (MRVL) and Datadog (DDOG) lagged badly.
Nonfarm payrolls came in well above expectations, up 311,000 vs. the 223,000 consensus estimate. But there was some Federal Reserve-friendly data inside the report. The unemployment rate rose to 3.6% from 3.4%, and the labor force participation rate unexpectedly rose to 62.5%. Average hourly earnings rose 0.2%, below the 0.3% consensus.
Dow Jones Today
American Express (AXP) and Goldman Sachs (GS) were early laggards in the Dow Jones industrials, with losses of around 2%.
Caterpillar (CAT) also underperformed in the Dow Jones index after UBS downgraded the stock to sell from neutral. The maker of construction and mining equipment reversed lower below its 50-day moving average Thursday.
Early gainers in the blue-chip index included Merck, Chevron (CVX) and Amgen (AMGN).
After falling below its 200-day moving average Thursday in heavy volume, the S&P 500 was down another 0.5%. The index suffered its fifth distribution day since Feb. 9 on Thursday, falling nearly 1.9% in higher volume.
Several bank stocks besides SVB took heavy hits in the S&P 500, including Signature Bank (SBNY), down 25%, First Republic Bank (FRC) and Zions Bancorp (ZION).
The Nasdaq composite was down 0.7%. Volume on the NYSE and Nasdaq was much higher compared with the same time Thursday.
Movers And Shakers
Outside of the Dow Jones, Oracle (ORCL) extended losses after losing support at its 50-day moving average Thursday in heavy volume. Earnings topped expectations, but revenue missed views.
Ulta Beauty (ULTA), meanwhile, reversed higher after reporting a 24% rise in quarterly profit, with revenue up 18% to just over $3.2 billion. Ulta also raised its full-year earnings and revenue guidance but guided same-store sales below expectations.
Inside the MarketSmith Growth 250, Western Alliance (WAL) extended losses after gapping below its 50-day line Thursday. Shares fell another 20%.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
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