U.S. Stocks Come Under Pressure After Early Advance To Record Highs

(RTTNews) - Stocks moved to the upside early in the session on Friday but have come under pressure over the course of the trading day. After reaching new record intraday highs in early trading, the major averages have pulled back firmly into negative territory.

Currently, the major averages are just off their lows of the session. The Dow is down 362.91 points or 0.8 percent at 45,258.38, the Nasdaq is down 147.36 points or 0.7 percent at 21,560.33 and the S&P 500 is down 51.59 points or 0.8 percent at 6,450.49.

The downturn on Wall Street comes as traders digest a closely watched Labor Department report showing much weaker than expected U.S. job growth in the month of August.

The report said non-farm payroll employment crept up by just 22,000 jobs in August after climbing by an upwardly revised 79,000 jobs in July.

Economists had expected employment to increase by 75,000 jobs compared to the addition of 73,000 jobs originally reported for the previous month.

The report also showed the uptick of 14,000 jobs that had been reported for June was downwardly revised to a decrease of 13,000 jobs.

Meanwhile, the Labor Department said the unemployment rate inched up by 4.3 percent in August from 4.2 in July, in line with economist estimates.

Traders initially reacted positively to the report amid optimism the data will convince the Federal Reserve to lower interest rates later this month.

Buying interest waned shortly after the start of trading, however, leading some traders to cash in the early strength amid concerns about the outlook for the economy.

"In the near-term, weaker jobs data will increase the odds of a Fed rate cut, but could create shorter-term volatility, as a weaker labor market is not a sign of strength," said Larry Tentarelli, Chief Technical Strategist for Blue Chip Daily Trend Report.

Sector News

Financial stocks have moved sharply lower over the course of the session, with the NYSE Arca Broker/Dealer Index plunging by 2.6 percent and the KBW Bank Index tumbling by 2.2 percent.

An extended slump by the price of crude oil is also weighing on energy stocks, dragging the NYSE Arca Oil Index and the Philadelphia Oil Service Index down by 1.9 percent and 1.7 percent, respectively.

Software and utilities stocks are also seeing notable weakness, while gold, housing and biotechnology stocks have shown strong moves to the upside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index shot up by 1.0 percent, while China's Shanghai Composite Index surged by 1.2 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the German DAX Index is down by 0.8 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.'s FTSE 100 Index is down by 0.1 percent.

In the bond market, treasuries have moved sharply higher in reaction to the weaker than expected jobs data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 10.2 basis points at 4.074 percent.