Stock market rout continues: Dow falls 500 points, Nasdaq drops 5%

Stocks fell once again on Friday as a sell-off in tech, the best-performing market sector in 2020, continued for a second day. The Dow Jones Industrial Average fell 521 points, or 1.9%. Earlier in the day, the Dow was up more than 200 points. The Nasdaq Composite dropped 5% and the S&P 500 slid 2.9%. Over the past two days, the Nasdaq has fallen by about 10%.

Apple shares dropped 8% and Facebook slid 6.6%. Amazon and Netflix slid 7.4% and 7%, respectively. Alphabet and Microsoft were both down 5%. Wall Street was coming off a massive sell-off that was sparked by a plunge in tech stocks. On Thursday, the S&P 500 tech sector suffered its biggest one-day drop since March. Tech’s sell-off after the space drove the lion’s share of the broader market’s comeback off the coronavirus sell-off lows. Since March 23, the S&P 500 tech sector is up about 70%. For the year, tech has rallied more than 30%.

U.S. unemployment falls
The U.S. unemployment rate fell to 8.4% last month from 10.2% in July, the Labor Department said. Economists polled by Dow Jones expected the rate to decline to 9.8%. As for overall jobs creation, employment in the U.S. grew by 1.37 million in August, topping an estimate of 1.32 million.

Bank stocks rose following the data release as Treasury yields climbed. Citigroup, Bank of America and JPMorgan Chase were all up at least 1.4%. Wells Fargo climbed 1%. The benchmark 10-year Treasury yield rose to 0.66%. The 30-year bond rate advanced to 1.4%.

Stock market rout continues for a second day as Dow falls 500 points, Nasdaq drops 5%, CNBC, Sep 4