Today was the day that “growth” stocks got taken to the woodshed. For some time now, energy, material, industrial and financial shares have all been under siege. Today, tech and internet/web based (high multiple) shares were given a beating. Led by a monstrous drop in LinkedIn which had disappointing earnings, growth type names, mainly presiding in the NASDAQ were where the damage was done. Overall, the indexes had a bad day, but “growth” stocks, which had held up best in this bear market, suffered much more.
As for the averages, by the close the Dow Jones Industrial Average was down 211 points to finish the week at 16,204. The S&P was down 35 to close at 1880. Gold was up $11 to trade at $1168 per ounce, while oil was down $.87 to trade at $30.85 per barrel WTI.
This morning’s jobs report had a little something for everyone, depending on your bias. The actual non-farm payroll number came in light at 151,000 new jobs created in January. The unemployment rate fell to 4.9%, which is impressive because the participation rate rose for the second month in a row. Another “positive” were average hourly earnings which continues to increase month after month (though not at any real accelerated rate). So, both the bulls and the bears could find something to like/dislike in today’s report.
Today put an exclamation point on a very odd week. it appeared we might escape the week unscathed when the jobs report hit this morning, but the bears grabbed the reigns and found a new victim- growth stocks. Let’s see what next week has in store for everyone, but first let me leave you with this definition of a bear market: an episode during which common stocks are returned to their rightful owners.
Enjoy the Super Bowl and have a great weekend everyone.