The stock market fell Monday on continued concerns about rising job activity and higher inflation. September inflation numbers are due out Thursday. Chip stocks and the broader technology sector led losses. U.S. automakers Ford and General Motors both fell after UBS downgraded their stocks.
The Nasdaq composite traded 1% lower, after initially climbing. The Dow Jones Industrial Average fell 0.1% and the S&P 500 lost 0.4%. The small-cap Russell 2000 index shed 0.5%.
Volume fell on both the Nasdaq and the NYSE vs. the same time on Friday.
Stock Market Dips On Escalation In Ukraine
Russia embarked over the weekend on its biggest missile assault in months on multiple cities in Ukraine, according to reports. After missiles hit at least 10 Ukrainian cities, President Vladimir Putin warned in a televised address that "no one should have any doubt" that Russia will defend itself, saying the massive strike was revenge for Ukraine attacking a major bridge in Crimea, which Russia invaded and took control of in 2014.
All three major stock indexes gapped down Friday. The Nasdaq composite slumped 3.8%; the S&P 500 lost 2.8% and the Dow Jones Industrial Average gave back 2.1%.
The losses did not undercut the lows set by the major indexes on Sept. 30. That left the rally attempt launched by Oct. 3's strong gains in effect. However, today the Nasdaq undercut its Sept. 30 low.
The jobs report on Friday showed the economy added 263,000 payroll jobs in September, the slowest monthly gain since December 2020. Still, the September unemployment rate fell to 3.5% from 3.7% last month, barely above the all-time low 3.4% in 1969.
"Yes, the persistent gain in jobs could keep alive the dream for a soft landing," said Jeffrey Roach, chief economist for LPL Financial. "But, the tighter labor conditions will likely keep the Federal Reserve (Fed) on track for another aggressive rate hike next month."
Meanwhile, President Joe Biden's approval rating has relapsed as recession fears mount and financial stress intensifies, a new IBD/TIPP Poll finds. Biden's job approval rating slid 3.7 points to 45.3 in October, giving back more than half the prior month's bounce.
U.S. crude oil prices fell 0.9% to $91.80 per barrel after rising last week on OPEC's decision to cut oil production. The Energy Select Sector SPDR ETF fell 2%, making it the worst-performing component of the 11 S&P sector.
Chips, Other Tech Stocks Lead Declines
The Technology Select Sector SPDR ETF fell 1.8%. Dow Jones tech titan Microsoft fell 1.9% while Apple traded flat. Chip leader Lam Research plunged 7%.
European markets were mixed Monday. The London FTSE 100 declined 0.3%, while the German DAX gained 0.1% and the French CAC 40 traded 0.3% lower.
In Asia, stocks fell after a renewed wave of pandemic-related lockdowns in major Chinese cities showed reduced consumer spending, according to a report in The Wall Street Journal. Official data released in recent days showed consumer spending falling sharply during the seven-day National Day holiday when compared with a year earlier.
Hong Kong's Hang Seng lost 3% and the Shanghai index fell 1.7%. Japan's Nikkei is closed today.
In the U.S., federal offices, banks and the bond market were closed for the Columbus Day holiday.
Tesla stock rose 0.5% after hitting a record of electric-vehicle deliveries from its Shanghai factory in September. Tesla China sales estimates for September totaled 83,135 vehicles, an increase of 8% compared to the prior month and a record. However, this is well below the 100,000 vehicle deliveries analysts had projected.
Amazon-backed Rivian stock plunged nearly 10% Monday after the startup EV maker announced a recall of nearly all of its vehicles to fix a steering defect. The loss sent shares of the Tesla rival to their lowest level since mid-July.
Automakers Slide After Downgrade
Ford skidded 7% after it was cut from neutral to sell by UBS, while GM stock declined nearly 6% after it was moved from a buy rating to neutral.
Kraft Heinz was up more than 2% after Goldman Sachs analyst Jason English upgraded shares to buy from neutral with a 43 price target.
Cloud-based software provider Five9 plunged more than 20% after announcing that CEO Rowan Trollope has resigned as CEO and after reporting preliminary Q3 results.
The Innovator IBD 50 ETF fell 1.9%, led down by chipmaker ON Semiconductor, which slid 7% as part of a chip stocks sell-off.
Third-quarter earnings season kicks off this week with results due from BlackRock, Delta Air Lines, Citigroup, Domino's Pizza, Morgan Stanley, JPMorgan Chase, UnitedHealth, Walgreens Boots Alliance and Wells Fargo.
Follow Michael Molinski on Twitter @IMmolinski
