Major stock indexes were down sharply in the stock market today after the December employment report came in stronger than expected. Insurer Travelers (TRV) lagged badly in the Dow Jones Industrial Average, while early gains faded for Tesla (TSLA) after the company launched a new Model Y in China.
In the chip space, Taiwan Semiconductor (TSM) gave back 1% despite reporting a 57.8% jump in December revenue in local currency. The world's largest chip foundry, which counts Apple (AAPL) and Nvidia (NVDA) as large customers, also said preliminary Q4 revenue was $26.36 billion, just a tad ahead of the FactSet consensus for $26.3 billion. Q4 earnings are due next week, with results due Thursday before the open.
↑ X NOW PLAYING Nvidia Has Dominated The AI Revolution. Can The Chipmaker Stay At The Front Of The Pack?After a 6% plunge Tuesday in higher volume, Nvidia extended losses and is now firmly below its 50-day moving average. Late Wednesday, Bloomberg reported that the Biden administration will impose additional curbs on selling AI and other advanced chips to Southeast Asia and Persian Gulf states.
The Dow Jones Industrial Average swooned 1.3%, or more than 500 points, as Travelers lagged. Shares of the insurer were down 3%. Property and casualty insurers were weak across the board in the stock market today as losses mount from raging wildfires in the Los Angeles area. The fires could end up being the costliest blaze in history with losses exceeding $20 billion, according to JPMorgan. Allstate (ALL) gave back 4%.
Dow Jones stock Home Depot (HD) was nearly flat and held up relatively well as Wall Street looked ahead to rebuilding efforts in LA.
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The economy added 256,000 jobs in December, well ahead of the Econoday consensus estimate of 157,000. The unemployment rate unexpectedly ticked lower and wages were a little softer than expected. But the 10-year Treasury spiked to 4.79%, the highest level in more than a year. The yield was recently trading around 4.75%, up seven basis points.
After a couple of good tests of its 50-day line, the Nasdaq composite breached the support level with a decline of 2.1%. The S&P 500 lost 1.6% and the Russell 2000 small-cap index fell 1.8%, falling below the 2,200 level. Volume on the Nasdaq was lower compared to the same time Wednesday. NYSE volume was higher.
The Nasdaq has been holding support at its 50-day moving average amid a clustering of distribution days since Dec. 27. Significantly higher-volume declines haven't been as pronounced on the S&P 500, but the index has been struggling to hold support at its 50-day line.
The stock market is still focused on a big jump in the 10-year Treasury yield since mid-September. Rate-cut expectations by the Federal Reserve have been dialed back significantly amid concerns that a strong economy could keep inflation at elevated levels.
Decliners swamped advancers on the Nasdaq by around 4-to-1. The ratio was 5-to-1 negative on the NYSE.
Delta Air Lines (DAL) jumped 11% in the stock market today and broke out to an all-time high after reporting Q4 results and giving strong guidance.
Constellation Energy (CEG) soared 21% and cleared a 14-week consolidation after the power generation firm agreed to acquire Calpine for $16.4 billion.
Follow Ken Shreve on X @IBD_KShreve for more stock market analysis and insight.
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