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Dec 3 (Reuters) - Wall Street's major indexes closed lower
on Friday, with the Nasdaq leading the declines as investors bet
that a strong jobs report would not slow the Federal Reserve's
easing of support all while they grappled with uncertainty
around the Omicron coronavirus variant.
After opening higher, Wall Street spent the rest of Friday's
session in the doldrums and an elevated volatility index
highlighted investor anxiety.
The Labor Department's report, ahead of the session's open,
showed that while nonfarm job growth rose less than expected in
November, the unemployment rate dropped to 4.2%, its lowest
since February 2020, and wages increased.
Separately, a measure of U.S. services industry activity hit
a record high in November.
Both sets of data appeared to influence investor
expectations for the Fed's next move towards tightening its
policy. Fed Chair Jerome Powell said this week that the central
bank will consider a faster wind-down of its bond-buying
program, a move seen by some as opening the door to earlier
interest rate hikes.
"There's not enough in the jobs report to dissuade the Fed
from accelerating the taper and leaves the door open for a
quicker rate hike than the market might have been anticipating,"
said Steve Sosnick, chief strategist at Interactive Brokers.
On top of this he pointed to concerns that the Omicron
variant appeared to be spreading faster than Delta, the last
most prevalent version of COVID-19.
The number of countries reporting Omicron cases kept
expanding but there was still little clarity on the severity of
the disease or the level of protection provided by existing
According to preliminary data, the S&P 500 lost 38.71
points, or 0.85%, to end at 4,538.39 points, while the Nasdaq
Composite lost 292.16 points, or 1.90%, to 15,089.16.
The Dow Jones Industrial Average fell 64.78 points, or
0.19%, to 34,575.01.
In a clear indication of investor nerves, Wall Street's fear
gauge, the CBOE Market Volatility index, went above 35,
in afternoon trading, for the first time since late January.
Meanwhile the S&P sector outperformers were defensive
sectors consumer staples and utilities.
However, the technology index, also often viewed
as a defensive option, was the biggest loser during the session.
Decliners included heavyweights such as Apple Inc,
Microsoft, and Google parent Alphabet.
"It's hard to argue that stocks with such huge valuations
are defensive," said Interactive Brokers' Sosnick.
And with large cap technology stocks having avoided a recent
deterioration in the broader markets, Sosnick said: "That's
catching up to those stocks."
The economically sensitive Dow fell less than its
peers during the session while other cyclical sectors like
industrials, materials also outperformed.
DocuSign Inc plunged on Friday after the electronic
signature solutions firm forecast downbeat fourth-quarter
(Reporting by Sinéad Carew in New York; Devik Jain, Anisha
Sircar and Sruthi Shankar in Bengaluru; Editing by Marguerita
Choy and Maju Samuel)