S&P Snaps 5-Week Win as Tech Bulls Go Awol

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Investing.com – The S&P 500 ended its five-week win streak on Friday, even as an Apple-led rebound helped the broader market off session lows and overshadowed concerns about the pace of the economic recovery amid a mixed jobs report.

The Dow Jones Industrial Average fell 0.56%, or 159 points. The S&P 500 was down 0.82%, while the Nasdaq Composite slipped 1.27%. Both the S&P 500 and Nasdaq ended their five-week win streak.

Apple (NASDAQ:AAPL) closed positive after falling more than 5% intraday. Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) also ended off session lows helping the broader market find its footing.

Microsoft was given added boost after the Pentagon reportedly reaffirmed that the tech giant’s proposal for the Jedi cloud contract represents best value, marking a blow to Amazon’s legal challenge to appeal the original decision.     

The Apple-led rebound comes in the wake of mixed jobs report that flagged concerns about the pace of the recovery. 

Nonfarm payrolls grew by 1.37 million last month, just below expectations of a 1.4 million, the Bureau of Labor Statistics reported Friday. But the unemployment rate fell to 8.4% from 10.2%, a sharper contraction than the 9.8% expected.

While the headline number was under consensus, a deeper dive into the report flagged concerns about the labor market as the gains were led by the hiring of government employees, while the private sector remains sluggish.

Private employers rehired just 1 million workers, and have recovered less than half the jobs lost in March and April.

Stifel Economics, however, suggested the report pointed to improving momentum in the labor market, which could “could alleviate pressure on the White House and Democratic leaders to restart stimulus negotiations, which have reportedly been stalled over the size and scope of the potential package.”

Ahead of the Federal Reserve’s meeting later this month, Powell described the jobs report as a “good,” and said the “the economy’s going to need low interest rates, which support economic activity, for an extended period of time,” according to NPR.

A rise in financials also supported the recovery, with JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS) trading in the green.  

Philadelphia Semiconductor Index fell 1%, but losses were stifled by a 3% rise in Broadcom (NASDAQ:AVGO).

Broadcom reported better-than-expected quarterly earnings late Thursday, and guidance topped estimates on expectations for a ramp-up in wireless. 

Elsewhere on the earnings front, DocuSign (NASDAQ:DOCU) slumped 11% despite reporting second-quarter earnings more than double consensus.  

Smith & Wesson Brands (NASDAQ:SWBI) also reported earnings and revenue that markedly topped analysts’ estimates but saw its shares slip more than 4%.

In merger news, Just Eat Takeaway said it had received all necessary regulatory approvals for its $7.3 billion merger with Grubhub, and expects the deal to be completed in the first half of 2021. Grubhub Inc (NYSE:GRUB) was down about 0.8%.