Shares fell again on Friday as the 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 was down 5% and the S&P 500 was down 2.9%. In the past two days, the Nasdaq is down about 10%.
Apple shares fell 8% and Facebook 6.6%. Amazon and Netflix were down 7.4% and 7%, respectively. Alphabet and Microsoft both fell 5%.
Wall Street had a massive sell-off triggered by a slump in technology stocks. On Thursday, the S&P 500 tech sector posted its largest one-day decline since March. Tech sell-off after the square drove the lion's share of the broader market's comeback off the coronavirus sell-off lows. Since March 23, the tech sector S&P 500 has risen around 70%. During the year the technology has grown by more than 30%.
"We've had excessive valuations in the markets lately – particularly in the technology space – and these had to be corrected to some extent," said Scott Knapp, chief marketing strategist at CUNA Mutual Group. "Look no further than the recent irrational surge in Tesla and Apple stock prices after both companies announced a stock split to see overabundance, especially among retail investors."
Both Tesla and Apple recently rallied after stock splits were announced.
However, more run-down parts of the market rebounded on Thursday, adding to those gains on Friday. The cruise operator Carnival gained 2.6% on Friday. United Airlines rose around 1%.
"We might finally see some rotations that could lead to new market leadership," said Peter Cardillo, chief market economist at Spartan Capital Securities. "We have been missing that for a long time."
Unemployment in the US is falling
The US unemployment rate fell to 8.4% last month from 10.2% in July, the Department of Labor said. Economists polled by Dow Jones expected the rate to drop to 9.8%. In terms of overall job creation, employment in the US rose 1.37 million in August, up from an estimate of 1.32 million.
"The job data was solid today," said Jamie Cox, managing partner at Harris Financial Group. "But now the real work begins."
"The next 2-3% job growth will be very difficult with no full reopening in sight. PPP funds are running low and the impasse in Congress, another round for the small businesses hardest hit by the pandemic, is closing approve are prescriptions for a wave of small business closings, "Cox said.
Bank stocks rose after the data was released as government bond yields rose. Citigroup, Bank of America and JPMorgan Chase all gained at least 1.4%. Wells Fargo was up 1%. The benchmark 10-year government bond yield rose to 0.66%. The 30-year bond rate rose to 1.4%.
Subscribe to CNBC PRO for exclusive insights and analysis as well as live business day programs from around the world.