U.S. Stocks Extend Slump as Attention Shifts to Friday’s Jobs Report

The Dow and broader U.S. stock market extended their slump Wednesday, as investors awaited new details on China trade talks and looked ahead to the February jobs report later this week. Cryptocurrencies held onto most of their Tuesday gains as altcoins and tokens showed greater poise.

Dow, Majors Extend Slump

All of Wall Street’s major indexes finished lower, with the Dow Jones Industrial Average sliding 133.17 points, or 0.5%, to 25,73.46. Most of the Dow 30 index members finished lower, led by Walgreens Boots Alliance (WBA), which fell 3.5%.

The broad S&P 500 Index declined 0.7% to 2,771.45. Losses spread across seven of 11 primary sectors, with energy stocks falling 1.6%. Health care declined 1.4% as a category.

The technology-focused Nasdaq Composite Index settled down 0.9% at 7,505.92.

Stock markets experienced a soft landing on Tuesday as the major indexes turned lower in the final moments of trade. Valuation risks and technical hurdles have prevented the S&P 500 and Dow from extending their two-month rally.

The CBOE Volatility Index, commonly known as the VIX, climbed 6.2% to 15.65, its highest in three weeks.

Nonfarm Payrolls on Deck

The month’s most anticipated data release will occur Friday when the U.S. Department of Labor reports on nonfarm payrolls. The monthly jobs report is expected to show the creation of 178,000 workers last month. Employers added 304,000 workers to payrolls in January, the strongest pace of job creation in a year.

Earlier in the day, the ADP Research Institute said private sector employment rose by 183,000 in February. The report generally mirrors of the official jobs data.

Unemployment is also forecast to tick lower to 3.8% from 4% in January. Average hourly earnings, a proxy for wage inflation, are projected to rise 0.3% month-on-month.

Job creation has accelerated under the Trump administration, helping to offset fears of a slowing economy. A new trade deal with China is expected to shore up export-sensitive industries, including manufacturing, and keep hiring on an even keel. According to The Wall Street Journal, a new U.S.-China trade agreement appears imminent after both sides crossed major hurdles last month.

Cryptocurrencies Show Poise

Crypto prices traded in positive territory on Wednesday, with Litecoin (LTC) and EOS (EOS) leading the market toward recovery. Both cryptocurrencies surged double-digits on Tuesday and held onto most of those gains in the most recent session.

At the time of writing, Litecoin was trading at $55.05 and was up slightly over 24 hours. EOS also held firm at $3.76, where it was some $400 million shy of its ICO market capitalization.

Read more: Ethereum, EOS, Litecoin, Bitcoin Cash: Major Cryptocurrencies are Escaping Bitcoin’s Sphere of Influence.

Bitcoin (BTC), the largest crypto in circulation, edged up 0.4% to $3,903.75. On Bitfinex, bitcoin came within $14 of $4,000.

The cryptocurrency market capitalization returned to $133 billion on Wednesday, as trade volumes exceeded $31 billion. Volumes had initially spiked above $36 billion on Tuesday when the initial relief rally began.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. Chart via Stockcharts.com.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi