U.S. Stocks Round Out Miserable Week in the Red as Trade Fears Linger; Crypto Crash Intensifies
U.S. stocks extended their losing skid to three days on Friday, as the S&P 500 and Dow turned negative for the year amid trade-related tensions and concerns over global growth. Cryptocurrencies also booked heavy losses, with the total market losing half its value in less than a month.
All of Wall Street’s major indexes booked heavy losses in the final session of the week. The Dow Jones Industrial Average fell 558.72 points, or 2.2%, to 23,388.95. Twenty-nine of 30 index members contributed to the decline, with tech juggernauts Microsoft Corp (MSFT), Intel Corp (INTC) and Cisco Systems Inc. (CSCO) leading the market lower. The Dow has shed nearly 1,500 points over the past three sessions.
The much broader S&P 500 Index fell 2.3% to close at 2,633.08. Ten of 11 primary sectors finished lower, with information technology shedding 3.3%. Industrials, healthcare and consumer discretionary shares all fell between 2.4% and 3% on average. Utilities, a sector known for its defensive posture, managed to rise modestly.
The technology-focused Nasdaq Composite Index declined 3.1% to close at 6,969.25.
A measure of implied volatility known as the CBOE VIX rose sharply on Friday, signaling tumultuous trading conditions over the next 30 days. VIX reached a session high of 24.71 on a scale of 1-100 where 20 represents the historic mean. It would later settle at 23.19, having gained 9.4%.
The U.S. labor market remained on solid footing last month, though signs of a cooldown emerged as employment growth lagged considerably below expectations. American employers added 155,000 workers to payrolls in November, following a downwardly revised gain of 237,000 the month before, the Department of Labor reported Friday. Analysts in a median estimate called for a November hiring pace of 200,000.
Average hourly earnings, a proxy for wage inflation, rose 0.2% month-on-month and 3.1% annually. The latter figure is encouraging for an economy that was bogged down by sluggish wage growth for the bulk of the post-crisis recovery. The 3.1% growth clip, now the second month running, is also the highest since 2009.
The national unemployment rate held steady at.3.7%, a nearly five-decade low.
Bitcoin and altcoins resumed their rapid selloff on Friday, leaving little doubt that the bottoming process was still in force. The combined value of all cryptocurrencies reached a low of $104 billion, levels that would have seemed unfathomable earlier this year.
With few exceptions, most major cryptos were on track for heavy losses for the week. EOS has lost a staggering 45% over the past seven days, with prices approaching $1.50. Bitcoin cash has lost 43% over the same stretch, reaching its lowest level on record. Ehereum plunged 24% week-over-week, while XRP and Stellar lost 19% and 32%, respectively.
Bitcoin’s price fell 18% during the week to reach $3,277.60, the lowest in 15 months. The leading digital currency now retains 55% of the total market cap.
The latest selloff has produced favorable conditions for Tether, which has regained its dollar-pegged status. The stablecoin is trading flat for the week at $1.00. Bitcoin SV also avoided weekly losses and currently trades at $95.34.
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.
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